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WAR TIME CONTROL OF 
DISTRIBUTION OF FOODS 



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THE MACMILLAN COMPANY 

NEW YORK • BOSTON • CHICAGO • DALLAS 
ATLANTA • SAN FRANCISCO 

MACMILLAN & CO., Limited 

LONDON • BOMBAY • CALCUTTA 
MELBOURNE 

THE MACMILLAN CO. OF CANADA, Ltds, 

TORONTO 



WAR TIME CONTROL OF 
DISTRIBUTION OF FOODS 

A Short History of the Distribution Division 

of the United States Food Administration, 

its Personnel and Achievements 



BY 

ALBERT N. MERRITT, Ph.D. 

Member of the Staff, United States Food Administration 



THE MACMILLAN COMPANY 
1920 

All rights reserved 



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Copyright, 1920, 
By THE MACMILLAN COMPANY 



Set up and electrotyped. Published, June, 1920 



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576242 



PREFACE 

In the attempt to present a brief history of the Dis- 
tribution Division of the United States Food Adminis- 
tration, we have found it quite impossible to treat the 
activites of this division apart from that of the whole 
Food Administration. The work of all divisions was 
so closely inter-related that it is difficult to point to a 
single achievement of any division which could have been 
effected without the closest cooperation and assistance 
from a number of Divisions which had charge of other 
phases of the activity. 

However, as we do not wish to write a history of the 
Food Administration as a whole, a task which has been 
left to other hands, we shall confine ourselves largely 
to a statement of the relation of the Distribution Divi- 
sion to the main Food Administration program. The 
fact that space does not permit us to refer especially 
to the activities of other divisions should not in any 
way detract from the importance of the service rendered 
by them, nor is it intended to qualify in any degree 
the previous statement that many of the achievements 
mentioned could not have been accomplished but for 
the cooperation of all branches of the Food Adminis- 
tration. 

We would also call attention to the fact that in this 
brief statement it is impossible to give special credit 
to individuals for their part in the activity of this 
division. All worked together. All spent their days 
and parts of their nights pondering over the vexing 
problems presented. In almost all cases the net results 
were produced by combining the ideas and views of all 
and the fact that a certain individual was in charge 
of a section of the division does not mean that the 



vi PREFACE 

activity of that section can be entirely attributed to 
this individual, but it must be attributed to the staff 
as a whole, as all were consulted and were always glad 
to render any advise or assistance possible in every 
important phase of the work in hand. 

The following men remained connected with the Dis- 
tribution Division practically from its organization till 
the withdrawal of the principal license regulations: 

Theodore F. Whitmarsh, Chief 
Henry J. Lahey, Assistant 

George E. Lichty, Head of Retail Section 

George A. Zabriskie, Flour and Sugar, Later Head of 
Division 
Frank A. Hoey, Assistant 

Charles Lester McCoy, Head of Report Section, 
Later head of Baking Section 

Bird W. Housum, Brokers' Section 

Charles Hatfield, Reports and Sugar Distribution 

Frank H. Millard, Commercial Conservation, and 
Specialty Manufacturers' Section 

Henry T. Leggett, Assistant to Mr. Whitmarsh 

Clement R. Winslow, Retail Section 

George W. Lawrence, Head of Coffee Section 

Albert N. Merritt, Publicity and Censor 

Others who were connected with the Division for a 
part or a greater portion of the time, and who per- 
formed important service for the Food Administration 
are: 

Dana Tarbell Ackerly, Head of Rice, n Coffee and 
Specialties Section 

Richard R. Williams, Jr., Head of Wholesale Section 

James W. Hunt, Later Head of Wholesale Section 

Louis T. Jaques, Retail Section 

Walter E. Coe, Retail Section 

Omar H. Cheer, Retail Section 



PREFACE vii 

Dana F. Ward, Retail Section Fish 
John Amerbach, Retail Section Meats 
Furman T. Nutt, Jr., Coffee Section 
Walter F. Blake, Coffee Section 
Max A. Christopher, Report Section 
Frank S. Tracy, Report Section 
Irving H. Taylor, Correspondence 
Mrs. Alice Gardner, Home Conservation 
Mrs. Albertnie H. Glenny, Home Conservation 
Miss Catherine C. Taussig, Home Conservation 
Richard J. Walsh, Publicity 
Duncan McDuffie, Head of Baking Section 
Benjamin R. Jacobs, Baking Section 
Harry F. Vories, Baking Section Crackers 
Harry D. Tipton, Baking Section 
A. J. Esberg, First Head of Baking Section 
Huntley M. Child, Baking Section 
Certain others were connected with the division at 
one time, but later became attached to other divisions. 
Among these were: 

Enforcement Division: 

Roland W. Boyden 

James A. Ford 

H. Parker Jones 

Louis Horace Sawyer 

Henry S. MacPherson 
Public Education: 

Trell W. Yocum 
Coarse Grains : 

John J. Stream 

Joseph R. Leguenec 

Scott F. Evans 

Maurice E. Landauer 

Matthew Purcell 

G. A. Chapman 



CONTENTS 

CHAPTER PAGE 

I The Task Ahead 1 

II The Beginnings of Sugar Control . . 8 

III The Licensing System 15 

IV Food Administration Regulations — Cost 

Basis Rule 23 

V License Regulations — " Series A and B " . 29 

VI General Purpose and Effect of the Vari- 
ous Regulations 37 

VII Control of the Unlicensed Retailer . . 44 

VIII The Dealers' Pledge Campaign . . . . 53 

IX Trade Abuses — Combination Sales . . 63 

X The " Fifty-Fifty " Rule 69 

XI Development of Rules and Regulations . 88 

XII Maximum Margins — Wholesale and Retail 98 

XIII Price Publication 110 

XIV The Sugar Certificate Plan . . . .115 

XV Development of Special Commodity Regu- 
lations 126 

XVI Voluntary Propaganda . . . . . . 148 

XVII The Eighty-Twenty Rule — Conclusion . 154 



WARTIME CONTROL OF 
DISTRIBUTION OF FOODS 



CHAPTER I 

THE TASK AHEAD 

The Food Control Act was passed by Congress and 
became effective August 10th, 1917. Mr. Hoover had, 
at the request of President Wilson, already come to 
Washington, and had gathered around him a few of the 
best trade advisors to be found in the country to assist 
him in formulating plans for the operation of the Food 
Administration after the law became effective. Among 
these men gathered as Mr. Hoover's Assistants was 
Mr. Theodore F. Whitmarsh, vice-president of Francis 
H. Leggett & Company of New York City, and at that 
time President also of the National Wholesale Grocers' 
Association. In this man was the dynamic force that 
was largely the source of the inspiration of every other 
man in the Distribution Division. Possessing almost 
the unlimited confidence of the Trade, he at once be- 
came a public servant of the most unflinching loyalty. 
At no time was the full performance of his public duty 
in any way affected by the fact that it might hurt the 
business of the trade with which he had been associated. 
His was the vision, and the dynamic force of perform- 
ance. With him there was no uncertainty; a decision 
was nearly always ready on the most difficult and per- 
plexing problems that had to be solved. He would 

1 



2 DISTRIBUTION OF FOODS 

rather be wrong and keep going till he found the right 
than to stagnate with the inertia of indecision. No 
man ever came to Washington for a conference with 
him who can forget his motto, " Keep your eye on the 
ball." 

Mr. Whitmarsh was in the game to beat the Hun and 
for no other purpose. He would give no considera- 
tion to any plan or ideas that did not seem to have a 
direct relationship to this one great aim. Time and 
again beautiful constructive schemes of food control 
and trade regulation were presented to him, whereby 
it was claimed that many long standing abuses of trade 
competition could be cured, but not one moment's con- 
sideration would they be given unless it could be shown 
that the scheme had a direct relation to winning the 
war. 

In fact this was the guiding principle of the whole 
Food Administration. Mistakes no doubt were made, 
but at no time was any act or regulation promulgated 
that was not believed to be necessary for the maximum 
effort required to win the war. Mr. Hoover was as 
firm as adamant on this point, and at no time did he 
" lose sight of the ball " — even for an instant. 

The objective set for the Food Administration was 
therefore simple and definite : — To Help Win the 
War. The necessary steps in this direction were 
equally susceptible of clear and succinct enumeration. 

1. To save food and prevent waste. 

2. To distribute it equitably. 

3. To distribute it at the lowest possible price to 
the consumer. 

4. To prevent hoarding. 

5. To save transportation. 

6. To encourage production. 



THE TASK AHEAD 3 

7. To facilitate the largest possible shipments of 
food to the Allies with the necessary shipments 
to neutrals and none to the enemy. 

8. To provide for the growing needs of our army 
and navy. 

On these fundamental principles, quoting from Mr. 
Whitmarsh, were to hang " all the law and the prophets 
(profits)." But the necessary steps by which these 
various principles might be put into operation pre- 
sented enormously vexing and seemingly insurmountable 
problems. Food Distribution had always been effected 
previous to this time under freely competitive condi- 
tions, where self-interest had been the motive power, 
and the law of supply and demand the controlling 
factor. Economists and business men throughout the 
country were practically unanimous in the opinion that 
it would be not only inexpedient but practically im- 
possible to obstruct seriously the law of supply and 
demand. But as the time approached for the actual 
operation of the Food Administration it became more 
and more apparent that radical interference with the 
law of supply and demand would have to be made. 

The season of 1917 proved most extremely disastrous 
to crops in America, as well as to those in practically 
every allied country. In fact there was scarcely 
enough food in the United States for our normal con- 
sumption, while in England, France and Italy, the 
amount of food available would hardly have met half 
their normal requirements. Submarine losses and the 
heavy drain on shipping necessary to transport troops 
and military supplies, rendered it practically impossible 
to use the surplus food, not a large amount at best, 
in the southern hemisphere and the far East. The 
whole burden was, therefore, largely thrown on the 



4 DISTRIBUTION OF FOODS 

shoulders of America, and America had to make good or 
lose the war. 

During the summer of 1917, prices for food products 
increased practically 100 per cent. There seemed to 
be no limit to the point to which they might advance. 
Although wages had advanced it would have been ut- 
terly impossible for them to keep pace with an un- 
controlled advance in food prices, without the complete 
overthrow of all industry. With supplies so seriously 
inadequate, it was evident that under the free operation 
of the law of supply and demand, those with accumu- 
lated wealth, both at home and abroad, would have 
whatever food they required for their comfort, and the 
poorer classes would get little or none. The law of sup- 
ply and demand offered no remedy for such an acute 
situation. Under its operation there could be no hope 
of securing an equitable distribution of food to the 
great masses of workers and their families. Hunger 
and starvation are the most compelling forces of all 
human activity. Those who are starving have fre- 
quently been known to eat even their fellow beings. It 
is at once apparent that with gaunt hunger and starva- 
tion prevalent among the masses, the maintenance of 
any stable government capable of effectively carrying 
on the war would be impossible. 

Under the operation of the law of supply and demand 
scarcity of food and high prices are supposed to stimu- 
late self-interest to activity for the prevention of waste 
and for greater production till the deficiency is removed. 
But the crop of 1917 had already been produced, and 
science had offered no means by which food could be 
produced in material quantities before another harvest, 
no matter what stimulus might be offered by famine 
prices. It was obvious also that as the 1917 crop had 
already been produced and was now largely in the hands 



THE TASK AHEAD 5 

of manufacturers and dealers, any further advances in 
market prices would simply mean a profit which would 
accrue to them, without their having rendered any cor- 
responding service. To be sure the same dealers and 
manufacturers would probably have to take correspond- 
ing losses during the readjustments which would occur 
at the close of the war, as there is always a sort of 
grim justice that works itself out in the operation of 
the law of supply and demand, but the exigencies of 
the war gave no opportunity even to consider such pos- 
sible contingencies. 

This country faced the stern necessity of the most 
extreme and arbitrary measures of conservation and 
control, or the loss of the war, which would practically 
have meant the destruction of civilization. 

It was with the greatest reluctance, therefore, that 
the members of the staff of the Food Administration 
undertook the difficult and vexing task of forcing water 
to flow up hill, and of bringing under arbitrary control 
those time honored economic principles upon which our 
whole fabric of production, distribution and consump- 
tion had been based. But it had to be done and Mr. 
Hoover and Mr. Whitmarsh and the members of the 
staff associated with them set their faces to the grim 
task of doing it. 

During the summer of 1917, the temper of the trades 
generally had been shown by expressions and resolu- 
tions of many national associations. These were 
almost without exception unanimous in willingness for 
any sacrifice necessary to win the war. The utmost 
confidence in the motives and leadership of Mr. Hoover 
was expressed, and it was obvious that the trades gen- 
erally were willing to accept his views and follow his 
directions, regardless of any personal opinions which 
individuals might hold. An army without this spirit of 



6 DISTRIBUTION OF FOODS 

unlimited sacrifice and confidence in leadership cannot 
fight, and fortunately for this country and for the 
world, the food trades automatically resolved them- 
selves into an army under Mr. Hoover's leadership, and 
this voluntary cooperation, so generally and so gener- 
ously given, eventually proved to be an enormous con- 
tributing factor in winning the war. It is safe to say 
that without these voluntary sacrifices of the trades the 
Food Administration could not have proved a success. 

In order properly to capitalize this good will, it was 
decided to allow the trades to regulate and police them- 
selves so far as possible. Before any important regula- 
tion was promulgated, a number of the representative 
men in each trade affected were called to Washington. 
In most instances they came fortified by the spirit of 
war service and sacrifice, but in all instances after a 
conference with Mr. Hoover and Mr. Whitmarsh and 
with other members of the staff, and when they under- 
stood clearly what the Government wanted, and were 
then asked to make suggestions for the regulation of 
their particular trades, it was found that they were 
not only willing to do everything asked of them, but 
were prepared to make even greater sacrifices than 
were thought necessary. 

Thus the principle of democracy and voluntary sub- 
mission to self-made regulations became one of the 
fundamental principles of the Food Administration, and 
was at all times the method by which it was primarily 
sought to attain the ends desired. 

The months of August, September and October, 
1917, were filled with such daily conferences with the 
representatives of the various trades. Manufacturers, 
wholesalers and retailers in every line of trade to be 
regulated were given an opportunity of expressing their 
views. Producers and consumers were also called in, 



THE TASK AHEAD 7 

and no source of information that might assist in the 
intelligent solution of the vexing problems confronting 
the Administration was left undrained. The wholesale 
and retail grocers especially gave evidence of their 
unswerving loyalty, and willingness to make any sacri- 
fice that might be required. As results proved, the con- 
fidence which the Food Administration placed in this 
method of government by the consent of the governed 
was fully justified. 



CHAPTER II 

THE BEGINNINGS OF SUGAR CONTROL, 

Even before the licensing system was perfected, the 
Food Administration was compelled to face an acute 
and perplexing situation with reference to sugar. 
Many of the sources of the sugar supply of the 
European allies in Belgium and Northern France had 
been destroyed. Submarine sinkings had not only 
caused the direct destruction of enormous quantities of 
raw sugar, but had rendered the shipping situation so 
acute that it was impossible to spare tonnage to pro- 
cure the large surplus of raw sugar in Java, amounting 
to nearly 1,000,000 tons. Our exports of sugar for 
the year 1917 were eighteen times the average for the 
three years preceding the war. Competitive foreign 
buying of raw sugar in Cuba became a near-panic when 
a clause was inserted in the War Revenue Bill provid- 
ing for the repeal of the draw-back on sugar exported 
from this country. While this provision was eliminated 
some months later, it was believed at that time that it 
would pass, and foreign buyers that had been depend- 
ing on exportations of refined sugar from this country 
later in the season, feared that they would no longer 
be able to procure their supplies as heretofore, and 
there was the most eager competitive buying in Cuba. 
This resulted in forcing up the price of Cuban raws 
in about six weeks from $5.77 to $7.77 per 100 pounds, 
duty paid, United States seaboard basis. The advance 
in the price of refined sugar was equally radical. 

S 



THE BEGINNINGS OF SUGAR CONTROL 9 

While most refiners did not officially advance their 
quotations beyond the $8.50 seaboard basis, on account 
of the extreme scarcity of available supplies, few of 
them if any were able to make shipments within 30 or 
60 days of the time the order was received, and those 
who had spot stocks were able to obtain almost any 
price they desired for immediate shipment. In fact in 
August the price of spot sugar ran as high as $9.15 
seaboard basis, and the demand was still unfilled. 

England had reduced her sugar ration to two pounds 
per capita per month, and France had reduced hers to 
only a little over one pound per month. Their sup- 
plies were down almost to the vanishing point, and con- 
sequently it seemed impossible for them even to main- 
tain this meager ration without liberal importations 
from this country. Notwithstanding the acute do- 
mestic situation, when these facts became known, Mr. 
Hoover immediately won the lasting gratitude of 
France by ordering the release for exportation to 
France of large stocks of sugar held at the Atlantic 
Seaboard, which had been intended for domestic con- 
sumption, and this country was thus brought face to 
face with an immediate and forced conservation of 
sugar. 

It is not our purpose here to dwell upon the various 
measures of voluntary conservation, but only to men- 
tion the method of control by which the price of sugar 
was prevented from mounting to such heights that this 
commodity would have been beyond the reach of the 
ordinary wage earner. 

In August, 1917, while the excitement was at its 
height, there was appointed an international sugar 
committee of which Mr. George M. Rolph, Head of the 
Sugar Division of the Food Administration, was chair- 
man. On this committee Sir Joseph White Todd and 



10 DISTRIBUTION OF FOODS 

J. Ramsey Drake represented the allied governments, 
and W. A. Jamison and Earl D. Babst, with Mr. 
Hoover as ex officio member, represented the Food Ad- 
ministration. The purpose of this Committee was to 
check the competitive buying of Cuban raw sugar, and 
to bring about an equitable division of the available 
supplies between this country and the Allies. A Com- 
mittee of refiners was appointed which consisted of the 
following: James A. Post, Chairman, Claus Spreckels, 
Charles M. Warner, George M. Earle Jr., and Robert 
M. Parker. This Committee agreed that the refiners 
would stop their competitive buying and limit their 
purchases to such quantities as might be authorized by 
the International Sugar Committee, which should also 
have the exclusive control of the price to be paid. 

Under the operation of this Committee the price of 
Cuban raw sugar declined to $6.90 by September 14th, . 
which was fixed as the maximum for the balance of the 
season's crop. 

Conferences were had with the refiners of cane sugar, 
and it was agreed that refiners would not charge a gross 
profit to exceed $1.30 per 100 pounds, which was to 
cover shrinkage and all costs of manufacture. This 
left them a net profit not to exceed their average earn- 
ings before the war. 

By agreement with the refiners also a maximum price 
of $8.40 f . o. b. seaboard was fixed for cane sugar in 
August, which was reduced to $8.35 October first, and 
to $8.15 December first. 

On November 30th, 1917, the International Sugar 
Committee negotiated its contract with the Cuban 
Sugar producers. Cuba was also at war with 
Germany, and the Committee representing the pro- 
ducers was found equally patriotic and ready for sac- 
rifice so that the contract as finally accepted permitted 



THE BEGINNINGS OF SUGAR CONTROL 11 

a price on refined cane sugar of $7.35 seaboard, which 
price became effective on the seventh of January, 1918. 

The beet sugar situation had to be treated in a little 
different way. The crop having already been pro- 
duced, no excessive profits could possibly enlarge the 
production for the current year. The price of beet 
sugar up to this time had always been entirely con- 
trolled by the price of cane sugar, but pending the 
arrival of the new crop from Cuba it appeared that 
this would have afforded the domestic refiners, under 
the present circumstances, a profit which could hardly 
be justified under the law. Accordingly several con- 
ferences were held with the representatives of the beet 
sugar refiners, and, actuated by patriotic motives, they 
agreed to sell their sugar after October first, on the 
basis of $7.25 per 100 pounds, plus freight from sea- 
board. This was nearly $1.50 per 100 pounds under 
the prevailing market prices, and represented a volun- 
tary sacrifice of the beet sugar interests. 

The action of the Western Sugar Refining Company, 
and that of the California-Hawaiian Sugar Refining 
Company are especially to be commended, for on ac- 
count of their geographical situation it was felt 
necessary that they should come in on the same terms 
as the beet sugar refiners, and as they had purchased 
their stocks of raw sugar based on the high prices of 
the preceding months, their agreement to sell on the 
$7.25 basis meant the direct loss of hundreds of 
thousands of dollars to them. 

All sugar sold by the western refiners after October 
first was therefore on the basis of $7.25 per 100 
pounds, seaboard. In order to make as little confusion 
as possible, the same price was made to apply on all 
sugar previously sold by the refiner that had not 
reached the purchaser on that date, regardless of the 



12 DISTRIBUTION OF FOODS 

contract price at which it had been sold. This of 
course meant revision of existing contract prices down- 
ward in amounts of from $1.00 to $1.50 per 100 
pounds. 

The next problem was to see that the consumer got 
the benefit of the reductions brought about by these 
sacrifices of the refiners and producers. All jobbers 
were informed at first unofficially, and later by direct 
announcement, that they must sell sugar on the basis 
of actual cost regardless of market conditions, and 
that they would in no case be permitted to exceed the 
margins which they customarily made before the war. 
It was further announced that any margin in excess of 
from fifteen to twenty-five cents per hundred pounds 
would be considered prima facie unreasonable, and the 
burden of justifying such excessive margin would be 
on the jobber. 

No specific margin was set for the retailer. It was 
not believed at that time that the unlicensed retailer 
could be controlled directly, but it was intimated that 
a profit of one-half to one cent per pound would be 
regarded as ample, and all licensees were instructed to 
see that during the readjustment period, sugar sold on 
the new basis should be resold by the retailer to the 
consumer at a correspondingly low price. Local food 
administrators were instructed to watch this situation 
and to report all cases of profiteering. 

The result of all this was naturally a condition of 
great confusion in prices during the month of October. 
On account of the extreme car shortage, the new crop 
did not begin to move in large quantities till the middle 
of the month, and in the meantime supplies were limited 
to stocks of high priced sugars. Most jobbers with- 
held from the market any low priced sugar arriving 
after the first of October, till their old stocks were ex- 



THE BEGINNINGS OF SUGAR CONTROL 13 

hausted, but as some jobbers were out of old stocks 
before others, the lower priced sugar came in to compete 
with remaining stocks of sugar bought on the higher 
basis, and while there was no surplus, the effect of the 
offer of the low priced sugar was such that many job- 
bers absorbed some losses on their existing stocks. 

Owing to failure of transportation facilities and to 
the conditions already mentioned, very acute sugar 
famines developed throughout the fall and early winter 
of 1917. On December 26th the total stocks of raw 
sugar on the Atlantic Seaboard were reduced to 5,946 
tons, only four days' supply for New York state alone. 

In many localities in the Eastern States sugar could 
not be procured at all for long periods of time. A 
method of controlling the retailer other than by volun- 
tary persuasion was found when the license regulations 
were promulgated, and the price was kept fairly well 
under control notwithstanding the acute shortage. An 
effort to relieve the situation in the East was made 
by bringing in Louisiana sugar, but on account of an 
early frost, this crop was greatly reduced, and the 
effort met with only indifferent success. For a time 
practically the only relief came from the release of 
sugar by countries owning stocks at the seaboard held 
for export, on condition that the sugar so released 
would be replaced when the new Cuban crop should ar- 
rive. Nevertheless the fundamental fact remains that 
in this one of the very first efforts to control the law 
of supply and demand, the price was controlled, and 
maintained to the consumer at an average of eight and 
one-half to nine cents per pound through the middle 
Western States, and at about ten cents per pound in 
the North Atlantic States, prices which were probably 
less than half what they would have been during this 
period if there had been no control. Also, through 



14 DISTRIBUTION OF FOODS 

the arbitrary powers exerted by the Sugar Distributing 
Committee, a more or less equitable distribution of the 
existing supplies was obtained. 

More will be said later relative to sugar control, and 
the only reason for bringing it in at this time is that 
all the important phases of the regulations were agreed 
upon and put into effect before the licensing system 
became operative, which is only one of the many strik- 
ing illustrations of the emergency character of all Food 
Administration measures. 



CHAPTER III 

THE LICENSING SYSTEM 

The first license proclamation of the President was 
issued under date of August 14th, 1917. AH millers 
of wheat and rye, and elevators handling and storing 
the same commodities, were required to operate under 
a Federal License after September first. Exception 
was made for millers with an operating capacity of 
less than 100 barrels daily, and for farmers' coopera- 
tive associations. 

Under date of September seventh a proclamation was 
issued requiring all importers, manufacturers and re- 
finers of sugar, sugar syrups and molasses to operate 
under a Federal License after October first, 1917. 

It was thought at first that it would not be necessary 
to place distributors of groceries generally under 
license, but as the problem was studied more minutely, 
it was found that the provisions of the Food Control 
Act and the penalties for its violation were not 
sufficiently definite to afford adequate control except 
under a licensing system, which it was felt should be 
applied only to the right of the dealer to handle some 
of the more important staple commodities rather than 
to the right to deal in foods generally. Accordingly 
under date of October eighth a proclamation was issued 
requiring that a license should be obtained by all im- 
porters, manufacturers and distributors of any of the 
following commodities: 

15 



16 DISTRIBUTION OF FOODS 

Wheat, wheat flour, rye or rye flour, 

Barley or barley flour, 

Oats, oatmeal or rolled oats, 

Corn, corn grits, cornmeal, hominy, corn flour, starch 
from corn, corn oil, corn syrup or glucose, 

Rice, rice flour, 

Dried beans, 

Pea seed or dried peas, 

Cotton seed, cottonseed oil, cottonseed cake or cot- 
tonseed meal, 

Peanut oil or peanut meal, 

Soya bean oil, soya bean meal, palm oil or copra oil, 

Oleomargine, lard, lard substitutes, oleo oil or cook- 
ing fats, 

Milk, butter or cheese, 

Condensed, evaporated or powdered milk, 

Fresh, canned or cured beef, pork or mutton, 

Poultry or eggs, 

Fresh or frozen fish, 

Fresh fruits or vegetables. 

Canned: Peas, dried beans, tomatoes, corn, salmon 
or sardines, 

Dried: Prunes, apples, peaches or raisins, 

Sugar, syrups or molasses. 

Exception was made for retailers whose gross sales 
of food commodities did not exceed $100,000 per 
annum, as these were exempt from license under the 
law. Exemption was also made for farmers, and for 
canners whose gross production did not exceed 5,000 
cases of canned goods per annum. 

The license proclamation of October eighth also 
brought under the licensing system operators of cold 
storage warehouses, and elevators for the storage of 
corn, oats, barley, beans, rice, etc. But our concern 



THE LICENSING SYSTEM 17 

here is chiefly with the application of the licensing rules 
to dealers in the non-perishable grocery products. 
More specifically, the list of non-perishables which were 
then licensed in the hands of the distributor consisted 
of the following articles : 

Barley flour. 

Canned or cured beef, pork, and mutton: 

Including : — 

Veal, lamb, and ham. 

Canned corn beef. 

Chipped beef. 

Drief beef. 

Sliced bacon, whether in containers or not. 

Excluding — 
Beef juice. 
Bologna. 

Canned chili meat. 
Corn beef hash. 
Deviled ham. 
Luncheon tongue. 
Mincemeat. 
Potted meats. 
Sausage. 
Scrapple. 
Tripe. 
Veal loaf. 

Canned corn (including canned hulled corn). 
Canned dried beans (including canned pork and 

beans, and chili con carne with beans). 
Canned peas. 
Canned salmon. 



18 DISTRIBUTION OF FOODS 

Canned sardines. 

Canned tomatoes (including paste, pulp, and puree). 

Coffee, green. 

Condensed, evaporated, or powdered milk. 

Cooking fats (including nut oil for cooking and edible 
tallow). 

Corn flour. 

Corn grits. 

Corn meal. 

Corn oil. 

Cornstarch (including laundry starch). 

Maple syrup. 

Dried or evaporated apples, peaches, prunes, raisins. 

Dried beans. 

Dried peas, pea seed (including cowpeas). 

Glucose. 

Hominy (including canned hominy). 

Lard. 

Lard substitutes (including butterine, cocoanut oil* 
butter) . 

Maple compounds. 

Maple sugar. 

Maple syrup. 

Mixed and self-rising flours containing more than 
50 per cent, of licensed flours. 

Molasses (including beet molasses and sorghum). 

Oatmeal. 

Oleomargarine. 

Oleo oil. 

Rice, cleaned. 

Rice flour. 

Rolled oats. 

Rye flour. 

Sugar (including refined, clarified, plantation- 
washed, open-kettle, maple sugar, and corn sugar). 



THE LICENSING SYSTEM 19 

•Syrups (including maple syrup; excluding beverage, 

medicinal, and rockcandy syrups). 
Wheat flour (including graham and whole-wheat 

flour). 

A few additional items were added by supplementary 
proclamations, but in the main the above list was not 
materially modified. 

After a few final conferences with the representatives 
of the wholesale and retail grocery trades, the " License 
Regulations Series B " were decided upon and 
promulgated as effective November first. Blanks for 
application for licenses were issued on request, and 
licenses were automatically granted to all distributors 
who filled out the application blanks and gave the 
required information. No charge was made for the 
issuance of the license, and, due to the wide publicity 
given, there were very few dealers who by November 
first had not applied for licenses. 

There was some misunderstanding, however, among 
a few of the smaller semi- jobbers who did both a whole- 
sale and a retail business, and who assumed that inas- 
much as their total gross sales did not exceed $100,000 
per annum they would not require a license. The Food 
Administration ruled, however, that if the dealer did 
any jobbing business at all of a substantial volume, or 
if he held himself out to the trade as a jobber he would 
require a license even though sales were less than the 
amount specified. The exemption was for retailers, 
and there was no exception provided for jobbers. A 
letter issued by the publicity section of the Distribution 
Division to all such semi- jobbers cleared up this point, 
and in a short time practically everybody had applied 
for licenses who should have done so. 

The purpose of the licensing system was to simplify 



20 DISTRIBUTION OF FOODS 

the enforcement of the law and regulations made there- 
under. Without it no penalties could have been in- 
flicted under the law except for specific violations 
proved beyond all reasonable doubt, and while the 
necessary legal machinery was being set in motion to 
obtain a conviction, the violations would have con- 
tinued, and it is possible that the war might have been 
over before any substantial line of enforcement cases 
could have been brought to successful conclusion. In 
the meantime distributors would have conducted their 
business about as they pleased. 

The licensing system put the burden of proof on the 
dealer. In case of violation of the regulations the Food 
Administration license could be withdrawn at any time. 
The business of the dealer would thus be closed entirely, 
and as a rule he was found to be quite willing to accept 
any pecuniary penalty and to give all necessary assur- 
ances for future good behavior, rather than to suffer 
the loss of his license which would result in the com- 
plete closing of his business. Furthermore, as all 
criminal statutes must be construed strictly for the 
benefit of the accused, it would have been impossible, 
without the licensing system, to put into operation 
many rules and regulations, which, while necessary to 
carry out the spirit and intent of the law, could not 
have been read into the law by any rule of construction. 

The licensing system facilitated the gathering of the 
necessary information for the enforcement of the rules 
and regulations. All licensees in the classes above 
enumerated were required to keep their records in a 
suitable condition and open to inspection by any duly 
authorized representative of the Food Administration. 
They were further required to submit monthly state- 
ments showing stocks on hand of the various licensed 



THE LICENSING SYSTEM 21 

goods, cost and maximum selling prices of same. These 
reports were to be substantiated by affidavit, and were 
easily susceptible of verification. 

The monthly reports were carefully scrutinized by 
the Report Section of the Distribution Division, and 
all excessive profits or other irregularities appearing 
were called to the attention of the licensee who made 
the report, and if the explanation proved unsatisfac- 
tory, or future reports showed the recurrence of the 
same irregularities, the matter was referred to the En- 
forcement Division. 

The licensee was required to print the number of 
his license on all contracts, invoices and quotations 
issued by him, and was further prohibited from dealing 
with any person, firm or corporation required to ob- 
tain a license under the proclamation but who had not 
done so. 

The licensing system had a most wholesome effect 
on the morale of the trade in general. Every dealer 
fully realized that he remained in business only by 
sufferance of the Food Administration. While the 
Food Administration was disposed to the greatest 
leniency toward first offenders, where it appeared that 
there was no intent to disobey the rules or regulations, 
it was soon understood that there would be no temporiz- 
ing with willful offenders. The nation was in peril and 
the whole world was in the deepest distress. Millions 
of individuals over the world were actually dying of 
starvation, and our own troops were going to France 
in great numbers. It was obvious, moreover, that un- 
less the morale of the civilian populations of France 
and England could be maintained by an adequate food 
supply, our army would be left practically alone to cope 
with the great military machine of the Central Powers. 



22 DISTRIBUTION OF FOODS 

Prompt and drastic action was necessary for the con- 
trol of a small percentage of dealers, and the licensing 
system afforded a ready means by which such measures 
could be effected. 



CHAPTER IV 

FOOD ADMINISTRATION REGULATIONS COST BASIS 

RULE 

In discussing the Food Administration Regulations 
it is not our purpose to quote in detail from the law, 
or from the various licensing proclamations, or even 
from the regulations themselves. These documents 
stand for themselves, and volumes would be required for 
their detailed study. It is our purpose merely to 
touch upon the fundamental principles of food control 
as applied to the so-called non-perishable groceries, the 
method by which these principles were applied to the 
practical problems of the trade, and in a general way 
upon the results accomplished. 

We shall pass by the method by which the wheat 
price was controlled and stabilized, for while the Dis- 
tribution Division was more or less directly connected 
with the plans for wheat and milling control, and while 
this control represents a most important phase of Food 
Administration activities, the discussion of these meas- 
ures belongs more properly to a general history of the 
Food Administration, or to a. special one of the Grain 
and Milling Division. We shall take up more particu- 
larly the problems of distribution as they affected the 
wholesale and retail grocers, and shall refer to im- 
portant commodity regulations only so far as may be 
necessary to illustrate the application of the general 
principles. 

When the plans for the control of staple groceries 

23 



24< DISTRIBUTION OF FOODS 

were first being formulated it was believed that such 
control might be effected through voluntary agreements 
with producers and distributors, as had been the case 
with sugar. Developments soon indicated, however, 
that there were many points of fundamental dissimu- 
larity between sugar and those commodities which it 
was now sought to control. The market on sugar had 
been stabilized by voluntary agreements with a com- 
paratively few refiners, which agreements eliminated 
entirely competitive buying of the raw product. 
Countless numbers of producers of such commodities 
as canned goods, beans, dried fruit, etc., all over the 
United States, distributing through as many varied 
channels, rendered the securing of any voluntary agree- 
ment of this kind impossible. Unfavorable weather 
during the summer coupled with the most unprec- 
edented and early freeze, which totally ruined the 
crops in many sections, had induced an extremely wild 
advance in market quotations on almost all staple gro- 
ceries during August and September, 1917. In the 
discussion that follows we shall merely take canned 
goods as an illustration of the condition of the market 
on many other staple groceries, as the majority were 
affected to a greater or less extent by similar con- 
ditions. 

A large proportion of the total pack of canned goods 
of this country is produced by small local canners. It 
is an industry which does not stand concentration or 
large aggregations of capital. The produce to be 
canned must be obtained in its fresh state direct from 
the grower, so that the radius of operation of the 
average canner is necessarily small. In order to insure 
a supply of the necessary raw material for his cannery, 
the canner must contract with the local growers for 
the crop of a certain number of acres to be planted 



FOOD ADMINISTRATION REGULATIONS 25 

for the production of a given commodity. These con- 
tracts are usually made in the early winter. The can- 
ner then begins to lay in his stocks of tin cans, cases, 
machinery, labels and other necessary supplies for his 
season's pack. In order to do this the majority of 
canners find it necessary to borrow considerable capital 
from the local banks. Before loaning the money the 
bank usually wants to be assured that the canner has 
a market for his product at a definite price which will 
afford him a reasonable profit on his estimate of costs. 
In order to gain this assurance for the bank, the canner 
makes contracts with responsible distributors for 
certain quantities of goods to be delivered when packed, 
at a definite price. These contracts enable the small 
canner to finance his operations for the season, and 
they constitute a necessary factor in the production 
and distribution of this commodity. 

The radical advance in prices which took place in 
the late summer and fall of 1917 was further aug- 
mented by increased requisitions by the army and navy 
of goods in the hands of packers. The price of canned 
goods broke away from all reasonable limits, and canned 
corn, peas and tomatoes advanced to two or three 
times their normal value. While this was the condition 
of the market at the time, a large part of the season's 
total pack was covered by future contracts between 
canners and jobbers which had been made in February 
and March of the same year at prices in many cases 
50 per cent, below the prevailing market. It ap- 
peared that on account of the government requisitions 
and the early frost, many canners would be unable to 
deliver more than 25 per cent, to 50 per cent, on their 
contracts, while some of course were unable to make 
any deliveries at all. Jobbers who had sold these 
goods to their customers for future delivery entered 



26 DISTRIBUTION OF FOODS 

the market for spot stocks in order to cover their sales, 
and indications were that canned goods would soon 
be a luxury beyond the reach of the masses. 

Many in the trade thought that the Food Adminis- 
tration should establish basic prices upon the principal 
licensed commodities upon which prices distributors 5 
margins could easily be figured. But this method of 
control was wholly impracticable. Not only was it 
impossible to get all the canners and growers of the 
country together to agree on a basic price, as was done 
in the case of sugar, but there was no means of enforc- 
ing such a basic price under the law, even if it were to 
be established. The Food Control Act gave the Food 
Administration no authority to demand that anybody 
should sell goods below the actual cost. Its authority 
was limited to seeing that no unreasonable profits were 
exacted. There were thousands of canners and 
growers who had lost the most of their crops through 
the early frost, and it appeared that with their small 
output, not even the prevailing market prices would 
afford them more than the actual cost of production, 
and there were no means by which such canners or 
growers could arbitrarily be compelled to reduce their 
prices. Furthermore many jobbers and retailers had 
already purchased goods at the basis of the advance 
and it would have worked an injustice to them to re- 
quire them to sell their stocks at a price materially 
below their cost, even if such action would have been 
permissible under the law. 

It was obvious, therefore, that it would have been 
impossible to establish any basic price at a point 
materially below the prevailing market. But to estab- 
lish a price in line with the market quotations would 
not only have fixed an abnormally high price for the 
consumer for the whole season, but it would have per- 



FOOD ADMINISTRATION REGULATIONS 27 

mitted excessive and unreasonable profits on the part 
of dealers and speculators who had purchased stocks 
through contracts for future delivery made in the 
winter preceding, and whose purchases on the basis of 
the existing market showed a profit of from 50 per cent, 
to 100 per cent, or in some cases even more. 

The natural inclination of the trade was to want to 
sell goods on the basis of the market value or cost of 
replacement. The Food Administration held a number 
of conferences with the wholesale and retail grocers on 
this point. While all indicated a desire and complete 
willingness to cooperate in whatever might be decided, 
it was with many misgivings that they contemplated 
the promulgation of an order which would compel them 
to sell their stocks of goods at a price far below the 
replacement value. 

Both Mr. Hoover and Mr. Whitmarsh were, however, 
very firm on this point. Under the stern necessities of 
war they felt that the Food Administration could never 
be justified in allowing merchants to absorb the tre- 
mendous unearned profits which had accrued on goods 
purchased for future delivery. Accordingly some time 
before the regulations were promulgated it was an- 
nounced that all licensed non-perishable groceries must 
be sold " at no more than a reasonable advance over 
the actual purchase price of the particular goods sold, 
without regard to market or replacement value at the 
time of such sale." The word " reasonable " was con- 
strued to mean the average percentage of profit made 
in pre-war times on the same commodity, on an even 
market and under freely competitive conditions. 

This was the cost basis rule, and it was founded on 
the theory that in the time of war and general distress 
no one should be permitted to make an excessive profit 
out of war conditions. It was believed that such profits 



28 DISTRIBUTION OF FOODS 

could only represent increased sufferings of others. 
This theory of normal profits as the maximum remained 
and was one of the guiding principles of this branch of 
the Food Administration throughout its existence. 

The effects of the operation of this rule and the de- 
tails of its application will be referred to later. 



CHAPTER V 

LICENSE REGULATIONS " SERIES A AND B " 

The first regulations promulgated were effective 
September 1st, 1917, and applied only to wheat and 
rye millers, and to elevators placed under license. The 
main features of these early regulations were: 

1. The licensee was prohibited from making any unjust 

or unreasonable profit. 

2. The licensee was required to permit the inspection 

of all records and books, and to make such reports 
under oath as required. 

3. All storage space of elevators was to be subject to 

use by the Government if required. 
4*. Wheat or rye could not be stored for a period of 
more than 30 days without the written consent of 
the Food Administration. 

5. Wheat and rye millers were prohibited from holding 

more than 30 days' supply of wheat or rye and 
the products thereof combined. 

6. Wheat or rye millers could make no contracts for 

the sale of their products that did not provide 
for shipment within 30 days. 

License Regulations Series B. covered the entire 
group of trades which were brought under the licensing 
system November first, and superseded previous regula- 
tion and informal announcements. 

29 



30 DISTRIBUTION OF FOODS 

We shall briefly refer to the more important pro- 
visions of these regulations as they affected the whole- 
sale and retail distributing trades. 

The three main purposes of the Regulations were 
stated as follows: 

" 1. To limit the prices charged by every licensee to 
a reasonable amount over expenses, and forbid the 
acquisition of speculative profits from a rising market. 

" 2. To keep all food commodities moving in as direct 
a line and with as little delay as practicable to the 
consumer. 

" 3. To limit as far as practicable contracts for 
future delivery, and dealings in future contracts." 

General Rules 

Rule 1. All licensees were required to keep their 
records open for inspection at any time by a repre- 
sentative of the Food Administration, and to give all 
information and to make out such reports as might 
be required from time to time. 

Rule 2. The licensee must permit the examination of 
his place of business and of all stocks of goods at 
any time on the request of a duly authorized repre- 
sentative of the Food Administration. 

Rule 3. The Licensee was requested to keep such 
books and records as to make practicable any reports 
required by the Food Administration. 

Rule 4. This rule prohibited any agent or employee 
of the Food Administration from divulging in any 
unauthorized manner, any information obtained by 
him while acting under authority of the Food Ad- 
ministration. 

Rule 5. This rule prohibited every " unjust, exorbi- 



LICENSE REGULATIONS 31 

tant, unreasonable, discriminatory or unfair com- 
mission, profit or storage charge." 

Rule 6. The Licensee was required to keep all food 
commodities moving in as direct a line as possible to 
the consumer, without unreasonable delay. Resales 
within the same trade without reasonable justifica- 
tion were prohibited, especially where such resales 
had a tendency to bring about a higher price to the 
consumer. 

Rule 7. Brokers were prohibited from buying and 
selling food commodities for their own account, un- 
less they held themselves out to the trade as dealers 
in the commodity concerned, and obtained a dealer's 
license. 

Rule 8. Licensees were prohibited from selling to 
brokers for the brokers' account, unless such 
brokers held themselves out to the trade as dealers. 

Rule 9. Minimum carloads were specified for all the 
more important licensed food commodities. 

Rule 10. Licensees were prohibited from dealing in 
food commodities for the purpose of controlling the 
supply or increasing the price. 

Rule 11. Waste or preventable deterioration in the 
process of the manufacture, storage or distribution 
of foods was prohibited. 

Rule 12. The licensee was required to notify the Food 
Administration within ten days of any change in his 
address or in the character of his business. 

Rule 13. The licensee was prohibited from having in 
his possession, or under control by contract or other- 
wise any food commodities in excess of his normal 
requirements for 60 days. Exception was made for 
the following seasonal commodities which the licensee 
was permitted to purchase and store for his season's 
requirements. 



32 DISTRIBUTION OF FOODS 

Cotton seed fresh fish canned corn 

cottonseed oil frozen fish canned salmon 

cottonseed cake fresh fruits canned sardines 

cottonseed meal fresh vegetables dried prunes 

peanut oil poultry dried apples 

peanut meal eggs dried peaches 

butter canned peas dried raisins 

cheese canned tomatoes molasses (in bulk) 

In order to effect economies in transportation, ex- 
ception was made so that a licensee might be permitted 
to purchase and store a carload of any licensed com- 
modity. 

Rule 14. The Licensee was prohibited from selling 
to anybody licensed commodities, except those 
specifically excepted under Rule 13, in quantities in 
excess of purchaser's normal requirements for a 
period of sixty days. 

Rule 15. The Licensee was prohibited from making 
any contracts for future delivery of licensed com- 
modities which did not provide for shipment within 
sixty days. 

Rule 16. Contracts entered into in good faith before 
October 15th, were not to be invalidated by the three 
rules preceding, but the licensee having outstanding 
any such contracts upon which performance was not 
completed before January first, was required to sub- 
mit a statement to the Food Administration giving 
all the facts with reference to such contracts, at 
which time a further announcement was to be made. 

Rule 17. Licensees were prohibited from selling to 
anybody who made any excessive charge in handling 
food commodities, or who stored or held stocks of 



LICENSE REGULATIONS 33 

foods beyond the requirements of his business for a 
reasonable time. 

Rule 18. The Licensee was prohibited from bribing 
or giving presents to the agents of any firm, individ- 
ual or corporation with whom he had dealings with- 
out the written consent of the principal of such 
agent. 

Rule 19. The Licensee should not make public any 
market quotations, nor should he make any state- 
ments relative to prices which might have a tendency 
to cause an advance, unless he could fully sub- 
stantiate such statements either from his own records 
or from the records of other licensees. 

Rule 20 consisted of definitions. 

Rule 21 provided that special rules should supersede 
the general rules in case of conflict. 

Rule 22. The licensee was required to print his license 
number on all contracts, bills or quotations issued 
by him, and he was prohibited from trading with 
those requiring licenses, but who had neglected to 
obtain them. 

We shall mention only a few of the special rules, as 
applied more particularly to wholesale and retail 
grocers. Under the caption applying to distributors 
of the " non-perishable " groceries we find : — 

" Rule 1. The Licensee shall sell the above food 
commodities at not more than a reasonable advance 
over the actual purchase price of the particular goods 
sold, without regard to the market or replacement 
value at the time of such sale." 

(This was the cost basis rule, already discussed, 
which constituted one of the main underlying principles 
of the Food Administration.) 



34 DISTRIBUTION OF FOODS 

The rules governing wholesale dealers in sugar in 
substance were as follows : — 

Rule 1. Dealers were not permitted to make a profit 
in excess of their normal margin, or in excess of 
such margin as might be announced by the Food Ad- 
ministration. (As already pointed out the Food 
Administration had fixed a maximum margin of 
15-25 cents per one hundred pounds for wholesale 
dealers in sugar.) 

Rule 2. If any resales of sugar were made between 
merchants in the same trade, the total margins of all 
dealers handling a particular lot of sugar should 
not exceed the maximum which would be permitted 
a single dealer. 

Among the Special Rules applicable to dealers in 
grain and cereal products we mention the following as 
more particularly affecting the wholesale and retail 
merchants. 

Rules 6, 7, and 8. The licensee in dealing in wheat 
or rye flour was not permitted to carry stocks of 
these articles exceeding thirty days' normal require- 
ments, and he could make no contracts for future 
delivery that did not provide for shipment within 
thirty days. 

Rule 9 provided that all sales of wheat or rye flour 
in excess of 25 barrel lots should be made under a 
uniform contract prescribed. 

Rule 10 provided that wheat or rye flour sold in pack- 
ages should be sold at package differentials to be 
prescribed. 

Rule 11. The cost basis rule was applied to dealers 
in all commodities of this class. 



LICENSE REGULATIONS 35 

Rule 13 fixed a maximum net profit of 25 cents per 
barrel for millers of wheat and rye flour, and a max- 
imum net profit of 50 cents per ton on wheat mill 
feeds, and provided a minimum milling extraction. 
The licensee was not permitted to charge any more 
for his flour if he purchased wheat at a price exceed- 
ing the Government price. 

Rice Millers 

Rule 1. Rice millers were prohibited from carrying 
stocks of rough rice in excess of 20 days' normal out- 
put. 

Rule 2. Rice millers were not permitted to carry 
stocks of cleaned rice in excess of 30 days' normal 
requirements, or to make any contracts for the sale 
of cleaned rice that did not provide for shipment 
within 30 days. 

Rule 3. Dealers in rough rice were limited to a gross 
profit of 1 per cent, over the cost of the goods sold, 
plus storage charges, interest, and insurance. 

Rule 4 provided that rice millers should be subject to 
the same cost basis rule mentioned above for other 
products. 

Canners 

Rule 1. Canners of peas, corn, tomatoes, salmon and 
sardines were prohibited from making any contract 
for future delivery of their products before February 
first of the year in which the goods were to be 
canned. 

Rule 2. The licensee was prohibited from making any 
contracts for future delivery of canned goods in 
excess of 75 per cent, of his average pack. 

Rule 4. The cost basis rule was applied to all goods 
manufactured and on hand. 



36 DISTRIBUTION OF FOODS . 

Rule 7. The licensee was prohibited from canning 
dried beans or dried peas, in tin, without a special 
permit from the United States Food Administration. 

Manufacturers of Beet Sugar 

Rule 3 prohibited the sale of sugar to speculators. 

Rule 4. The licensee was prohibited from making 
contracts for the sale of sugar that did not provide 
for shipment within ten days. 

Rule 5. The licensee was prohibited from selling 
sugar to anybody in excess of purchaser's normal 
requirements for 30 days. 

Rule 6. Every licensee was required to issue a price 
list showing seaboard price and differentials in the 
principal markets in which he did business, and also 
the differentials charged for package goods. He 
was required to sell only at the quotations named 
and he was not permitted to change his list without 
mailing a copy of the revised list to the Food Ad- 
ministration. 

Rule 7. The maximum commission fixed for sugar 
brokers was five cents per 100 pounds. 

As far as interested the trade generally, the regula- 
tions governing the refiners of cane sugar were very 
similar to those for manufacturers of beet sugar, ex- 
cept that the cane sugar refiner was permitted to make 
contracts for shipment 30 days from the date of con- 
tract. 

A brief discussion of the principles involved in some 
of the rules will be found in the following chapter. 



CHAPTER VI 

GENERAL PURPOSE AND EFFECT OF THE VARIOUS 
REGULATIONS 

We shall briefly touch upon the general purpose and 
effect of a few of the rules and regulations which 
require some further explanation beyond the bare state- 
ment of the rule. 

General Rule 5 prohibiting excessive profits was 
based on Section Four of the Food Control Act. It 
was interpreted very differently, however, for the 
various groups of commodities* Thus in the group of 
perishables it was obvious that owing to the frequent 
violent local market changes which sometimes occurred 
almost over night, the dealer should have some means 
of recouping his losses on one transaction by excep- 
tional gains on another, or he would be compelled to 
go out of business entirely. Accordingly the dealer 
in this group of commodities was permitted to base his 
selling price on the market, but he was limited to a 
reasonable profit on his business for the season. 

Flour millers were limited to a specific net profit of 
25 cents per barrel on flour and 50 cents per ton on 
feed, but for the 1918 crop this was changed to a 
gross profit basis. Rice millers and sugar refiners 
were limited to a specific gross profit. Lard substitute 
manufacturers were limited both as to the price to be 
paid for the raw material and as to the selling price of 
their products. A maximum selling price was fixed 

37 



38 DISTRIBUTION OF FOODS 

for packers of dried fruit, sardines and salmon. Meat 
packers were controlled by the limitation of a maximum 
profit of 9 per cent, on the actual capital invested and 
by a maximum of 2% per cent, net on their annual 
sales as well as by the reasonable profit rule on the 
specific sale. Canners were subject to the reasonable 
profit rule on current sales, and to specific margins on 
the 1918 pack. 

Our chief interest here however is with what was at 
that time Rule 1 of the Special Regulations for Dis- 
tributors of Non-perishables. This is the cost basis 
rule discussed in a previous chapter. As already 
pointed out, wholesale and retail dealers in October of 
1917 had large quantities of canned goods and other 
commodities purchased for future delivery at prices 
ranging far below the market quotations prevailing at 
the time. It had always been the custom of the jobbing 
trade and to a certain extent of the retail trade to 
base selling prices on the market value of the com- 
modity sold, rather than on invoice cost. As market 
quotations fluctuated up and down the dealer under 
this system was as apt to suffer a loss as to make a 
gain through the action of the market. The excep- 
tional losses counterbalanced the exceptional gains, and 
the normal profit of the dealer consisted in the average 
by which his selling prices exceeded his cost prices. 
Without doubt this method of merchandising is the 
only method practicable in normal times, and under 
free competition the law of supply and demand holds 
the profits of dealers to a normal reasonable basis. 

But under the extraordinary conditions of war which 
the country faced at that time, the whole theory of 
supply and demand had to be relegated to the scrap 
heap. Dealers were required to sell the licensed foods 
on the basis of cost, notwithstanding market conditions. 



GENERAL PURPOSE AND EFFECT 39 

To illustrate : — • 

Canned corn which cost the jobber 95 cents per 
dozen purchased for future delivery in February, 1917, 
had to be sold on the basis of its cost possibly at not 
more than $1.05 per dozen. On account of short de- 
liveries from the packers and of insufficient supplies in 
general, the jobber who was thus compelled to sell corn 
at $1.05 per dozen was at the same time bidding as 
high as $1.80 or $2.00 per dozen for the same grade 
of goods still in the hands of canners. 

This naturally resulted in much confusion of prices. 
The jobber who was fortunate and had received liberal 
deliveries on his future contracts was thus enabled and 
required to quote prices to the retail trade far below 
those that could be quoted by the jobber who had not 
bought futures, or who had received but a small pro- 
portion of actual deliveries on his future contracts. 

In order to avoid the extreme confusion that would 
have otherwise resulted, jobbers and retailers were per- 
mitted to average the cost of all lots of goods of the 
same size and grade purchased before the license rules 
became effective, so that assuming that each merchant 
had bought a certain proportion of futures and a 
certain proportion of " spot " goods, their average 
costs would be more or less similar, and a selling price 
would be established somewhere between the market 
price as it existed at the time and the price paid for the 
futures. Through the operation of this rule the re- 
tailers received their stocks of goods at prices generally 
far below the existing wholesale price for the same goods 
at first hands, and means were found for compelling the 
retailer in the majority of cases to give the benefit of 
such purchases to the consumer. 

The net result was that in many instances consumers 
were able to purchase canned goods by the single can 



40 DISTRIBUTION OF FOODS 

at prices sometimes from 20 to 25 per cent, below the 
price at which " spot " stocks in the hands of canners 
could be purchased. 

The operation of this rule by placing in circulation 
a large quantity of low priced goods and by compelling 
canners to dispose of existing stocks of goods on the 
basis of their actual cost had more or less of an imme- 
diate effect on the canned goods market, and quotations 
for canned goods from canners were soon lowered by 
from 10 to 15 per cent. 

To the lasting credit of the wholesale and retail 
trades of America it may be said that the vast majority 
of dealers cheerfully accepted this anomalous condi- 
tion and played the game fairly, notwithstanding the 
fact that it meant the sacrifice of the enormous profits 
which had been rendered available by the action of the 
market. 

It is estimated that on the group of non-perishables 
alone, as applied to the crop of 1917, the cost basis 
rule saved for the consumers of this country not less 
than $500,000,000 which would have otherwise gone to 
dealers as war profits. 

Rule 6 or the resales rule, prohibited resales of 
licensed food commodities from one dealer to another 
in the same class of trade, without reasonable justi- 
fication. It was obvious that no limitation of profits 
of any distributor would be of benefit to the consumer 
if one dealer could sell to another in the same class and 
the purchaser and seller should both be permitted to 
exact the normal profit allowed. In this way profits 
could easily have been pyramided and divided among 
several dealers, and the consumer would have lost all 
the benefit which he derived from the operation of the 
cost basis rule. 

When first promulgated this rule caused a great deal 



GENERAL PURPOSE AND EFFECT 41 

of confusion. With certain commodities and between 
certain dealers some resales within the same class of 
trade are necessary in order to effect the most 
economical distribution. Many dealers feared to make 
any resales at all, and in some cases the operation of 
the rule held up the prompt distribution of supplies. 
But it was not long till the special regulations applying 
to the various classes of trades were so amended as to 
define specifically what resales were justifiable, and the 
maximum profit which would be allowed in such cases. 
Throughout the entire period of operation of the Food 
Administration the theory prevailed that resales should 
be permitted only where some necessary economic 
service was performed, and in all cases profits of both 
parties to the transaction were closely limited. In 
some instances, as in the case of flour, feeds, sugar, and 
on "pickups" (accommodation sales) generally, the 
profits of both dealers could not exceed the maximum 
which would be permitted either one on a single sale. 

Rule 9. Minimum Carloads. The tremendous in- 
crease in the exportation of food and munitions, 
coupled with the shortage of ocean tonnage, had con- 
gested all Eastern terminals, and side tracks were 
blocked with long lines of loaded cars that could 
not be moved. This condition threatened the com- 
plete breakdown of transportation, with the result- 
ing failure of food distribution. Radical action was 
therefore necessary to save transportation, and to re- 
duce to a minimum the number of cars required to per- 
form the necessary service. This rule provided an 
average increase in the minimums over those of the 
published tariffs of the carriers which was about 50 
per cent. These minimums remained in force with but 
a few modifications till after the armistice was signed. 
It would be utterly impossible to estimate the number 



42 DISTRIBUTION OF FOODS 

of cars saved by the cooperation of the trades in con- 
forming to these minimums often at great disadvantage 
to them. It is safe to say, however, that the number of 
cars required for the distribution of the commodities 
on the non-perishable list of groceries was reduced fully 
25 per cent. The cooperation of the railroads in en- 
forcing this provision was most valuable, but the obliga- 
tion to conform to the minimum stated was one which 
the licensee owed directly to the Food Administration 
and not to the carriers. At no time were the railroads 
granted authority to refuse to accept shipments which 
were in conformity with their published tariffs, but 
which did not conform to the Food Administration mini- 
mums. 

While this requirement of extra heavy loading of 
cars was absolutely necessary as a war measure under 
the conditions which the country faced at the time, 
there are many reasons why it would be improper to 
apply the same rules in normal peace times. The ex- 
cessive loading of cars not only increases the liability 
of the shipment to damage, but automatically causes 
many dealers to lay in larger stocks of goods than they 
would otherwise have to carry. Where jobbers secure 
their supplies by pool cars there is apt to be a con- 
siderable increase in the hauling or switching charges. 
Under the operation of this rule, a number of instances 
occurred where jobbers were unable to make up cars 
of the required weight. In such cases the Food Ad- 
ministration, when the facts were placed before it, 
would grant an exception to the rule, rather than to 
allow the shipment to be made at the less than carload 
rate, which would not have been an enconomy in 
transportation. 

Rules 13 to 16 inclusive are the hoarding rules. It 
was the desire of the Food Administration to prevent 



GENERAL PURPOSE AND EFFECT 43 

the accumulation of excessive stocks in the hands of any 
dealer, and to keep all foods moving as rapidly as pos- 
sible in a direct line to the consumer. Neither whole- 
saler nor retailer was permitted to buy for himself more 
than a sixty-days' supply of licensed foods, nor to sell 
more than a sixty-days' supply to any purchaser. Ex- 
ception was made for such commodities as were 
seasonal, and could not well be carried in stock from 
one season to the next at the point of production. 
These commodities, already enumerated, could be pur- 
chased in quantities sufficient for normal requirements 
for the season. The enforcement of the hoarding rule 
presented some of the earliest and most interesting cases 
where penalties were inflicted. We believe it safe to 
assert, that during the period of the war, hoarding of 
food stuffs in the hands of dealers was practically un- 
known, and the few cases where penalties were inflicted 
were so exceptional as to prove the immense value of 
these rules. However, hoarding on the part of the 
grower or consumer was quite a different matter, and 
had to be overcome almost entirely by artificial 
restrictions on the quantity of food which a retailer 
might sell to any given person, and more particularly 
by voluntary propaganda, thus enlisting the active 
moral support of the consumer. There were a few 
cases where penalties were inflicted on consumers for 
hoarding, though the legal basis for these penalties 
was in some doubt. Farmers as a rule were required 
to bring to market their entire surplus of the 1917 
wheat crop. 

The intent and effect of the other rules already 
enumerated are so obvious by their mere statement, that 
we will for the present omit further reference to them, 
and pass directly to the discussion of general Rule 17, 
and the successful effort made to bring the unlicensed 
retailer under direct control. 



CHAPTER VII 

CONTROL, OF THE UNLICENSED RETAILER 

It was with many misgivings that the Food Adminis- 
tration first undertook the control of the profits of the 
distributing trades. Congress had seen fit to exempt 
from the application of the licensing system both 
growers and associations of growers, as well as retail 
grocers whose gross sales of food products did not 
exceed $100,000 annually. The class of exempted 
retailers thus embraced more than 95 per cent, of the 
total number of retail dealers in the United States. 
While the general provisions of the law applied to all 
persons alike, it was only natural that retailers and 
growers should assume that the exemption from the 
licensing system virtually exempted them from the 
application of the law. It was obvious to the Food 
Administration that if both ends of the channels of 
distribution were thus to be free from control, the 
sacrifices forced upon all intermediate elements in the 
scheme of distribution would be in vain, as both pro- 
ducer and retailer would continue to exact whatever 
profits the law of supply and demand afforded them, 
and the consumer would be wholly unprotected from 
the possibility of unlimited profiteering. 

It is not our purpose here to dwell upon the various 
steps by which the producer of the more important 
staples was limited in the amount which he could obtain 
for his products. By the direct control of licensees, 
and through the control of exports, certain limitations 

44 



CONTROL OF UNLICENSED RETAILER 45 

were placed upon the amount which licensees might pay 
the producers for certain raw products, and by the 
enforcement of the hoarding provision of the law 
against producers as well as others some control of the 
price to be paid for farm products was effected. The 
chief concern of the Food Administration, however, with 
reference to the producer, was to see that the maximum 
production possible should be effected, and expression 
of this concern was given by the liberal profits and 
guaranteed prices offered the producers of many of the 
more important staples, so that the farmers constituted 
practically the only class which was protected from 
the possibility of losses due to radical declines in the 
market which were apt to occur in case of an early 
peace. 

On the other hand, it was felt that the unlicensed 
retailer was entitled to no more special favors than 
were the other necessary agents of distribution. It 
was his business to pass food commodities along to the 
final consumer at the lowest possible margin, and if he 
had failed in his duty in this respect, or had attempted 
to exact the maximum profits possible under the near 
famine conditions that prevailed, food control would 
have been a failure. It was recognized that the 
patriotic motives of the large proportion of retailers 
would make possible a fairly adequate control of the 
majority of the trade for a short time, but it was 
equally well recognized that such a scheme of voluntary 
submission to control could not long be successful unless 
some means were found of forcing compliance on the 
retailer who refused to accept or submit to such con- 
trol. The moral effect of allowing such dealers to go 
without punishment would have soon broken down any 
scheme of voluntary control. 

Unfortunately the penalties which might be inflicted 



46 DISTRIBUTION OF FOODS 

for the violation of Section 4 of the Food Control 
Act were in considerable doubt, and it was not believed 
that any adequate control could be effected through 
an attempt directly to enforce the provision of the 
Law. Accordingly an attempt was made to bring the 
unlicensed retailer under indirect control, which fortu- 
nately proved successful, and later afforded an effective 
means by which he was brought practically under the 
direct control of the Food Administration regulations 
almost to the same extent as the licensee. 

The retailer though unlicensed was not in a position 
to purchase but an infinitesimal proportion of the sup- 
plies for his normal requirements directly from the un- 
licensed grower. His supplies must necessarily pass 
through the hands of the licensed jobber. As licenses 
were granted or withdrawn by the Food Administra- 
tion, practically at discretion, it was believed tha,t the 
licensee could be required to submit to any reasonable 
regulation, even though the regulation found no 
counterpart in the law itself. Through Rule 17, of the 
General License Regulations, a drastic and effective 
penalty was read into Section 4 of the law itself where- 
by the licensee was prohibited from selling any food 
commodities to any dealer who violated the fundamental 
provisions of the Food Control Act. We quote this 
rule in full: 

Rule 17. The licensee shall not knowingly sell any food 
commodities to any person engaged in the business 
of selling such commodity, who shall after this regu- 
lation goes into effect, violate the provisions of the 
Act of Congress approved August 10, 1917, by mak- 
ing any unreasonable rate or charge in selling or 
otherwise handling or dealing in such commodity, 
or by holding, contracting for, or arranging for a 



CONTROL OF UNLICENSED RETAILER 47 

quantity thereof in excess of the reasonable re- 
quirements of his business for use or sale by him for 
a reasonable time. 

With this rule as a basis the entire scheme of the 
control of the retail trade was built up. The enforce- 
ment of the penalty provided entailed considerable dif- 
ficulty, and required the giving of notice to all licensees 
not to sell any supplies to the dealer in question. In 
almost every case however the retailer found guilty of 
exacting excessive profits or hoarding was glad to sub- 
mit to any alternative penalty, and to give any assur- 
ance required for future good conduct, rather than 
to allow the imposition of the penalty provided in this 
rule, which not only would close his business entirely 
till such time as the Food Administration felt inclined 
to remove the ban, but would also virtually ruin his 
reputation for fair dealing and render difficult if not 
impossible the conduct of a successful business after 
the war. The few cases where it was necessary to 
exact this penalty were handled with such speed and 
efficiency that a wholesome respect for the Food Admin- 
istration was soon instilled in the mind of the most 
recalcitrant and unpatriotic retailer. Throughout the 
entire course of operation of the Food Administration, 
the unlicensed retailer was brought by these means prac- 
tically under the same control as that exercised over the 
licensed retailer, and with the exception of licensees' 
reports he was subject generally to all the regulations 
promulgated affecting the distribution of commodities 
at retail. 

However the Food Administration did not rely en- 
tirely on the enforcement of this regulation to secure 
efficient control of the unlicensed retailer. Acting 
under the theory that voluntary cooperation afforded 



48 DISTRIBUTION OF FOODS 

better results than compulsory control, plans were de- 
veloped for securing this cooperation from the entire 
retail trade of America. In the conferences which 
were held preceding the promulgation of the Rules and 
Regulations, no important branch of the trade was 
left without giving its representatives an opportunity 
to be heard. Under the inspiration given these trade 
committees by such men as Hoover, Whitmarsh and 
Lichty, they became fired with a patriotic zeal to do 
their share in winning the war at whatever sacrifice 
necessary. Accordingly these representatives of the 
trade drew up a series of resolutions, pledging their ef- 
forts to secure the complete cooperation of the entire 
retail trade in all points of the Food Administration 
program. We quote below the resolutions in full : 

" We, representing retail distributors of food 
products in the United States, in meeting assembled 
at Washington, D. C, October 17, a. d. 1917, do unan- 
imously endorse and heartily approve the action of the 
President of the United States and of the Food Admin- 
istration in proclaiming certain fundamental neces- 
saries of life, and requiring that those dealing in these 
foods shall be put under license and governed by cer- 
tain rules and regulations, to the end that these staple 
foods constituting the great bulk of the daily rations 
of the American people may be efficiently mobilized and 
controlled and placed in the hands of the consuming 
public at reasonable prices and without profiteering and 
manipulation. 

" Further, as a result of our deliberations, we 
unanimously resolve and declare our purpose as fol- 
lows: 

" 1. We will, whether licensed or not, cooperate with 
the U. S. Food Administration in every way possible 



CONTROL OF UNLICENSED RETAILER 49 

to insure the enforcement of its rules and regulations 
and the success of its conservation plans, and deliver 
to the consumers of the United States the necessaries of 
life as cheaply as it lies within our power to do. We 
will earnestly and vigorously recommend all other retail 
grocers to pursue this course steadfastly. 

" 2. We recommend that retail grocers discontinue 
the soliciting of orders during the period of the war. 

" 3. We recommend the limitation of all deliveries 
to one a day to any one family or on any one route. 

" 4. We recommend that under conditions and in 
localities where it is feasible, the cooperative system of 
delivery be employed. 

" 5. We urge all retailers and their clerks to concen- 
trate their efforts on selling wholesome and nutritious 
substitutes for white flour and meat. 

" 6. We recommend that the retailers use their efforts 
to sell articles of food that are cheap yet of good 
quality in the place of iiigh priced staples, and that in 
doing so they be guided by the recommendation of the 
Conservation Department of the Food Administration. 

" 7. We urge the most strict economy in the conduct 
of all retail grocery stores, and constant effort to 
eliminate all waste and extravagant methods, to the end 
that time, energy, fuel, equipment, and men may be 
conserved, and that wholesome food may be placed in 
the hands of consumers at the lowest possible prices. 

" 8. We recommend that retailers throughout the 
country and their associations, Local, State and Na- 
tional, cooperate to the fullest extent with the U. S. 
Food Administration, and that they immediately ex- 
press their purpose so to do by communicating direct 
with the Administration in Washington. 

" 9. We express our appreciation of the support that 
has been given the Food Conservation work by the trade 



50 DISTRIBUTION OF FOODS 

papers of the country and earnestly solicit their con- 
tinued cooperation with the Food Administration. 

" 10. We recommend that all retail grocers assist in 
the potato campaign of the Food Administration by 
urging the sale of that commodity this season. 

"11. We urge that all food products, where possible, 
be sold by weight in reasonably large quantities and for 
cash. 

" 12. We recommend that all retailers urge the sale 
of such items as small prunes, cornmeal$ oatmeal, rice, 
hominy and similar articles in bulk. 

" 13. We ask all retailers to urge the sale of such 
articles as soup stock and materials, peas, rice, barley, 
fresh vegetables and fresh and canned cove oysters. 

" 14. To the end that the country's industries and 
their workers may be maintained at the greatest ef- 
ficiency, and that any unreasonable profits or specula- 
tion in food staples may be eliminated, we pledge our- 
selves to the United States Government not to sell any 
of the fundamental necessaries (as announced by the 
President of the United States in his Licensing Proc- 
lamation of October 8, 1917) at a margin of profit 
over the delivered cost to the merchant that will yield 
to him more than a reasonable living profit, irrespective 
of the market conditions at time of re-sale; and we 
pledge ourselves to urge other grocers, whether under 
the licensing plan or not, to the end that margins of 
profit by retail grocers throughout the country over the 
cost to them shall not be greater than prevails under 
normal conditions. We urge that each retail grocer 
act individually, and that he sell the staple foods at no 
greater profit than is reasonable in accordance with 
their cost, and his individual cost of doing business, as 
sanctioned by the U. S. Food Administration. 

15. We earnestly urge the members a,nd officers Qi 



u 



CONTROL OF UNLICENSED RETAILER 51 

every association of retail grocers as well as individual 
grocers in their respective communities, to advocate 
these principles persistently in their local associations, 
and to other retail grocers of the country, that in this 
grave national crisis, when our country needs us most, 
we may not fail vigorously to uphold the needs of the 
Government and to do our utmost toward a speedy and 
triumphant conclusion of our war against Germany." 

Copies of these resolutions were sent to all jobbers 
with the request that they distribute them to the retail 
dealers of the country without expense to the Govern- 
ment. The response immediately given by the jobbing 
trade was truly significant. Scarcely a single one 
failed to reply to this appeal, and the aggregate number 
of copies requested for distribution exceeded 3,000,000. 
As this was far in excess of the total number of retail- 
ers in the United States, the number of copies sent to 
each jobber was materially reduced from the number of 
copies requested, but it is safe to assert, that there is 
probably not a single retail dealer in the United States 
that did not receive one or more copies of these resolu- 
tions from the jobber from whom he secured his sup- 
plies. 

The Retail Section of the Food Administration per- 
sonally took up these matters with representatives of 
the larger chain stores, and with the mail order houses, 
and the cooperation of these agencies was assured. A 
list of secretaries of all state and local retail grocers 
associations was obtained, and the Retail Section kept 
in close touch with these secretaries at all times. The 
cooperation of these various local associations proved 
most invaluable, and enabled the dealers of the country 
to work out the problems of food control as affected 
their trade collectively among themselves, so that per- 



52 DISTRIBUTION OF FOODS 

haps the best policeman for the retailer consisted in 
his fellow retailer who was not only desirous of carry- 
ing out the spirit and intent of the law, but was equally 
interested in seeing that his competitor should conform 
to the same rules. 

Nor did the effort to secure the voluntary coopera- 
tion of the retailer end at this point. He was brought 
into personal touch with local representatives of the 
State Food Administration, and with the vast army of 
traveling salesmen who pledged their cooperation in 
personally disseminating instructions from the Food 
Administration, and by means of the pledge cam- 
paign, and by price publication, supplemented by 
direct communications from Washington, he was at all 
times made to feel his personal responsibility to the Gov- 
ernment and to his Country. 



CHAPTER VIII 

THE DEALERS' PLEDGE CAMPAIGN 

What was perhaps the most important single agency 
relied upon to bring the wholesale and retail trades 
into complete cooperation with the Food Administra- 
tion was the voluntary pledge asked and obtained 
from practically every dealer in the United States. 
A large pledge poster entitled "WAR CONSERVA- 
TION " was sent to all licensed jobbers with a personal 
appeal from Mr. Hoover, requesting that this pledge 
poster should not only be signed and displayed, but 
that each house should also pledge the active coopera- 
tion of its entire sales force in obtaining similar pledges 
from retail dealers, as well as in personally distributing 
Food Administration literature, and in assisting to edu- 
cate all retail dealers to complete and active coopera- 
tion in the Food Administration program. 

The response of the wholesale trade was immediate 
and gratifying. Pledge cards were soon received from 
practically all wholesale dealers in the country. The 
number of salesmen reported by each house was used 
as a basis for the apportionment of the work of dis- 
tributing Food Administration literature, and of ob- 
taining pledges from the retailer, and each salesman 
was given a Food Administration button in recognition 
of his services. From this time on throughout the en- 
tire course of operation of the Food Administration 
whenever the services of the 25,000 traveling salesmen 
who were pledged for this work were desired, the neces- 
sary material was mailed directly to the various jobbing 
houses in quantities proportionate to the number of 

53 



54 DISTRIBUTION OF FOODS 

salesmen employed, and as a rule the wishes of the Gov- 
ernment in the matter in hand were promptly carried 
out with little loss of material or delay. 

The method and character of this pledge campaign 
may best be portrayed by a brief pamphlet which was 
issued at the time by the Publicity Section of the Dis- 
tribution Division and which we quote in full. (See 
pages 55—62.) 

In all about 430,000 of the pledge posters for retail 
dealers were distributed through the services of the 
traveling salesmen of the wholesale grocery houses. 
In a few states where the interest was perhaps less 
active, material assistance was given by the organiza- 
tions at the disposal of the State Food Administrators, 
whose services at all times were an indispensable aid in 
carrying into effect all Food Administration policies, 
but who are mentioned but briefly in these pages, not 
because their work was unimportant, but because this 
sphere of activity more properly belongs to a general 
history of the Food Administration, rather than to a 
history of the Distribution Division. 

The pledge campaign was immediately supplemented 
by the distribution through the jobbers' mail of prac- 
tically one million copies of a brief " War Message " 
issued to the retail trade, and by a large postal card 
which was mailed direct to the retailers of the country, 
both of which set forth the main principles upon which 
the cooperation of the retailers was sought, and em- 
phasized the fact that the exemption of the retailer 
from license did not exempt him from the application 
of the law, and that through the enforcement of Gen- 
eral Rule 17, all retailers found guilty of hoarding or 
exacting more than a reasonable profit over cost of the 
goods sold would be subject to the drastic penalty of 
being cut off from their sources of supply. 



UNITED STATES 
FOOD ADMINISTRATION 



Enlisting the Food Merchants 



A campaign to win the voluntary support of 
retailers and wholesalers 



THE METHOD OF DEMOCRACY 




55 



To Serve our Country we have 

enlisted in the 

United States Food Administration 



U. S. Food Administration Controlled Commodities 



Apples, dried 
Beans, dried and 

canned 
Beef, fresh, 

canned and 

cured 
Bread 
Butter 
Cheese 

Cooking Fats 
Corn, canned 
Corn Grits 
Cornmeal 
Corn Oil 



Corn Syrup 

Cottonseed Oil 

Eggs 

Fish, fresh and 

frozen 
Flour 

Fruits, fresh 
Hominy 
Lard 
Milk, fresh, 

canned and 

powdered 
Molasses 



Mutton, fresh, 

canned and 

cured 
Oatmeal and 

Rolled Oats 
Oleomargarine 
Peaches, dried 
Peanut Oil 
Peas, dried and 

canned 
Pork, fresh, 

canned and 

cured 



Poultry 
Prunes 
Raisins 
'Rice 

Salmon, canned 
Sardines, canned 
Starch, corn 
Sugar 
Syrup 
Tomatoes, 

canned 
Vegetables, fresh 



We pledge ourselves to give 

our customers the benefit of 

Fair and Moderate Prices, 

selling at no more than a 

Reasonable Profit above Cost 

to Us 




THE RETAILER'S STORE POSTER WHICH SHOULD BE DISPLAYED 
IN EVERY ONE OF THE 400,000 FOOD STORES IN THE COUNTRY 

56 



Enlisting the Food Merchants 

A CAMPAIGN TO WIN THE VOLUNTARY SUPPORT OF 
RETAILERS AND WHOLESALERS. 



THE METHOD OF DEMOCRACY. 

Sweeping powers for compelling the sale of fundamental 
foods at reasonable prices and for punishing those who 
speculate, hoard, or engage in other unfair practices are 
given to the Food Administration under the law of August 
10, 1917. 

The aim of the Administration, however, has constantly 
been to accomplish its purposes with a minimum of compul- 
sion, through voluntary support and compliance with the 
law, in spirit as well as in letter, on the part of patriotic 
manufacturers, wholesalers, retailers, and others handling 
staple foods. 

There are solid grounds for this aim. Already hundreds 
of firms engaged in these businesses have freely pledged 
their cooperation and backed their pledges by action — 
often at great cost to themselves. 

In order to crystallize this support and extend it to in- 
clude all handlers of necessary foods, a national campaign 
has been organized. 

TO REACH 400,000 RETAIL GROCERS. 

All retailers of food, of whom there are more than 400,- 
000 in the United States, are to be reached by this cam- 
paign. Each will be invited to enlist as a member of the 
Food Administration. He can not do this, however, until 
he has signed a pledge to give his customers the benefit of 
fair and moderate prices, to sell the necessaries of life at • 
no more than a reasonable profit above cost to him, and to 
cooperate with the State and National food administrators. 

This pledge is presented to the retailer in the form of a 
large attractive poster, printed in two colors and bearing 
a list of the 20 or more groups of foods which the Food 
Administration is seeking particularly to control. Having 
signed his name to the pledge, the retailer hangs the pos- 
ter in his store or window, where it may be seen by his cus- 
tomers. 



57 



Thus displayed, the poster serves at once as an advertise- 
ment for the store and a constant reminder to the merchant 
and his customers of his obligation to sell at reasonable 
prices. 

ALL WHOLESALERS TO HELP. 

In order to reach all retail merchants, wholesale grocers 
are being asked to assist, through their salesmen who are 
in daily contact with the trade throughout the United 
States. 

All wholesale grocers who obtain licenses are also in- 
vited to become members of the Food Administration. 

In order to obtain such membership the wholesaler must 
sign a pledge similar to that signed by the retailer. 

This pledge, together with the list of licensed foods, is 
also part of another large poster headed " War Conserva- 
tion Program." Each wholesaler is given a copy of this 
poster to be signed and displayed in his place of business. 

Each licensed dealer signing this pledge is also given the 
right to print on his letterheads, invoices, and other station- 
ery the words " Member of the United States Food Admin- 
istration," with the shield-and-sheaf insignia, for which a 
cut is given to him. This insignia may be used in connec- 
tion with the license number, which is required to be printed 
on all invoices, contracts, orders, etc. The insignia cut, 
however, should not be used in advertisements. 



EKLISTIXG THE SALESMEN. 

The connecting link between the wholesaler and the small 
retailers is supplied by the salesmen. As soon as a com- 
pany becomes a member of the Food Administration it is 
asked to give active assistance in enrolling the retailers 
whom the salesmen meet in their daily work. 

The particular duty of the salesmen is to obtain pledges 
from retailers, and to supply those who enlist with copies 
of the retailers' poster. For this purpose every member is 
given a number of copies of the retailers' poster which he 
undertakes to distribute. 

In addition to wholesale grocers, the licensed manufactur- 
ers, brokers, canners, packers, and others who come in con- 
tact with the retail trade will be welcomed as members, and 
invited to assist in the movement in whatever way may 
seem practicable. 

It is estimated that about 40,000 salesmen will be en- 
gaged in the campaign as part of their daily routine, and 



58 



that through their active effort practically every store in 
which foods are sold will be solicited to give its voluntary 
support to the Food Administration. 

Many wholesale grocery houses, manufacturers, and 
others hold weekly or fortnightly sales conferences. At 
each of these conferences the manager is asked to set aside 
five minutes for discussion of the campaign, including a 
short " ginger-talk," for which material is sent to him. 

The Federal Food Administrators in all States will also 
accept pledges and supply posters to retailers. Representa- 
tives of the State administrators will be on the watch to 
see that posters are displayed in all stores, and where the 
poster does not appear will investigate the reason. If a 
merchant displaying the poster is not living up to the 
pledge, the State Administrator has authority to remove the 
poster. 

THE DEMOCRATIC WAY. 

The significance of this broad campaign is far deeper 
than may appear at first thought. It is indeed typical of 
the whole program of the Food Administration, in its in- 
sistence upon cooperation rather than coercion, upon the 
compelling force of patriotic sentiment as a means to be 
tried before resort to threats and prosecutions. 

It has often been asserted that " democracy cannot make 
war efficiently " ; that before we can win, we must adopt 
autocratic methods. America to-day is fighting for democ- 
racy in a double sense. _ 

It is striving to " make the world safe for democracy," 
and in doing this to prove beyond doubt that democracy 
can be efficient, that it can be so organized as to be infinitely 
more powerful than autocracy. 

MOST MERCHANTS ARE PATRIOTIC. 

The great majority of American citizens engaged in sup- 
plying food to the people are both honest and patriotic — 
like the great majority of men engaged in any other legiti- 
mate business. They have been quick to come forward and 
pledge their full support. By the thousands they are 
joining the forces of the Food Administration, because they 
are glad to find a tangible way of guaranteeing this sup- 
port. 

All of this vast force of public opinion is being thrown 
into the balance on the side of fair merchandising and mod- 
erate prices, lifting into the strong light of exposure those 
few who are disloyal and dishonest. 

This is the democratic way of getting results. 



59 



It works somewhat more slowly. It is far more sure. 

And it leaves behind it, when the emergency has passed, 
not a trodden, broken-spirited people, but a people strength- 
ened, purged, and inspired by the knowledge that they have 
won by their own endeavor. 



The insignia below may be used on stationery, invoices, etc., 

by wholesalers and other licensed dealers signing the 

pledge to cooperate with the Food Administration 



MEMBER Or 

US. FOOD 

ADMINISTRATION 




60 



UNITED STATES FOOD ADMINISTRATION 

WAR 
CONSERVATION PROGRAM 



THE TASK AHEAD 

GERMANY'S greatest ally is the false belief in the 
United States that the war will be short. Face 
the grim facts. Prepare in your own home, in your 
business, and in your community. 



Business efficiency 

This is a war not of armies 
and navies, but of nations. 
We must have better mer- 
chants, better laborers, bet- 
ter citizens. 
Business must go on and shall 
prosper — but waste, extrav- 
agance, must' end. 

Conserve 

Food — time — energy — materi- 
als — equipment . 
Do your best to aid in the 
production of more food. 

Prevent waste 

As a war measure, make fre- 
quent and PERSONAL 
study of your business, and 
find what savings can be 
effected. 

Stocks 

Reduce duplicate stocks with- 
in reasonable limits. 

Fair profits only 

Do not make or accept any 
unreasonable rate, charge, 
or price. 

Avoid speculation 

Buy only for PRESENT needs 
and to meet the known re- 
quirements of your normal 
trade. 

Do not sell to or buy from 
speculators. 

Discourage purchases beyond 
usual needs by consumers, 
retailers or others. 



Service 

Render no extra or nonessen- 
tial service to customers. 

Curtail credits within reason- 
able limits. Encourage cash 
transactions. 

Eliminate all unnecessary de- 
livery service. Save labor 
and time for the war. 

Persistently discourage tho 
practice of returning goods. 

Sell in original packages. 

Transportation 

Save cars, ships, and other 
transportation equipment. 

Insist upon close, secure, and 
careful packing. 

Load to capacity. 

Order capacity carloads re- 
gardless of the minimum 
tariff requirements. 

Load and unload promptly. 

Buy food products produced 
at near-by points wherever 
possible. 
Salesmen 

Enlist the patriotic coopera- 
tion of your salesmen, and 
have them in their daily 
visits to the trade, urge 
conservation. 
Home economics 

Through your own advertis- 
ing, your salesmen, and 
your personal influence in 
your own community, aid 
in the food conservation 
campaign. 

EAT WISELY AND WITH- 
OUT WASTE. 



POSTER FOR WHOLESALE DISTRIBUTORS LICENSED BY 
THE FOOD ADMINISTRATION (CONTINUED ON NEXT PAGE) 

61 



U. S. FOOD ADMINISTRATION CONTROLLED 
COMMODITIES 



Wheat, wheat flour, 
rye, rye flour 

Bread 

Barley, barley flour 

Oats, oatmeal, rolled 
oats 

Corn, corn grits, corn- 
meal, hominy, corn 
flour, starch from 
corn, corn oil, corn, 
syrup, glucose 

Rice, rice flour 

Dried beans 

Pea seed, dried peas 

Cottonseed, cottonseed 



oil, cottonseed cake, 

cottonseed meal 
Peanut oil, peanut 

meal 
Soya bean oil, soya 

bean meal, palm oil, 

copra oil 
Oleomargarine, lard, 

lard substitutes, 

oleo oil, cooking 

fats 
Milk, butter, cheese 
Condensed, evaporate 

ed and powdered 

milk 



Fresh, canned and 
cured beef, pork 
and mntton 

Poultry, eggs 

Fresh and frozen fish 

Fresh fruits and veg- 
etables 

Canned: Peas, dried 
beans, tomatoes, 
corn, salmon, sar- 
dines 

Dried : Prunes, ap- 
ples, peaches, rais- 
ins 

Sugar, « syrups, mo- 
lasses 



AS A MEMBER of the United States Food Administra- 
. tion, we pledge to the Government, and to our fellow- 
countrymen, that we will, to the best of our ability, ad- 
here to the war conservation program and loyally coop- 
erate with the Food Administration. We pledge ourselves 
to give our customers the benefit of FAIR AND MOD- 
ERATE PRICES, selling at no more than a REASON- 
ABLE PROFIT ABOVE COST TO US. 



Signed 



Member of the United States Food Administration, 
and Licensed Thereunder 



BALANCE OF POSTER CONTINUED FROM PRECEDING PAGE 

62 



CHAPTER IX 

TRADE ABUSES COMBINATION SALES 

Wasteful competition among dealers had given rise 
to many trade practices which had served to increase 
the cost of the distribution of food products, but which 
served no real economic purpose in the scheme of distri- 
bution. Under this heading may be classed the abuse 
and waste through careless buying and returned goods, 
trading stamps, premiums, excessive delivery service, 
extensive credit, and combination sales. In going over 
the field of trade abuses it was only natural that the 
representatives of the trades desired the Food Adminis- 
tration to eliminate all such abuses as wasteful prac- 
tices, but after the most careful consideration of this 
subject, the Food Administration decided that it could 
take no action toward the elimination of abuses per se 9 
except in a recommendatory way. If the trades could 
not themselves voluntarily find a means of eliminating 
competitive abuses which increased their expenses of 
doing business with no corresponding benefit to the con- 
sumer, it could not be the prerogative of the Food Ad- 
ministration to regulate the trades and do for them 
what they ought to do for themselves without compul- 
sion. The relation of such regulations to the enforce- 
ment of the law and to the winning of the war was not 
sufficiently definite, and the field presented such intri- 
cate and perplexing problems, and such a vast diver- 
gence of local conditions, that effective regulation along 

some of the lines proposed appeared unlikely. 

03 



64 DISTRIBUTION OF FOODS 

Accordingly the activity of the Food Administration 
in this direction was largely confined to recommenda- 
tions and suggestions which in many cases assisted the 
trades in regulating themselves on these points. 
Though under pressure to do so at times, the Food 
Administration did not take any direct position against 
the giving of premiums and trading stamps, but war- 
time economies, forced on all dealers, led to the almost 
complete abandonment of these practices. 

The Food Administration undertook an' active cam- 
paign to reduce the number of retail deliveries to one 
per day, and in some localities to establish cooperative 
deliveries. In this effort it was supported by the neces- 
sity of the reduction of expenses forced upon all re- 
tailers, owing to the scarcity of labor and materials. 
The consumer was appealed to and asked to accept 
the reduced services given by the retailer in the same 
spirit in which other war sacrifices were borne, and sub- 
stantial progress was in this way effected. 

Much literature was distributed in the interest of 
cutting down excessive credits and of establishing the 
cash and carry system wherever practicable. The 
housewife was asked to do her own marketing as far as 
possible, and the general theory prevailed that where 
the consumer demanded unnecessary and unreasonable 
service, this should be refused entirely or charges made 
accordingly. The War Industries Board in connection 
with the Food Administration instituted a vigorous 
campaign against the returned goods evil in all lines of 
trade and very substantial progress was made toward 
the elimination of this wasteful practice. 

The proper consideration of these various measures 
of the Food Administration to effect war economies 
in distribution through the elimination of abuses of the 
kind mentioned would require a treatise in itself, and 



TRADE ABUSES 65 

as we are more particularly concerned at this time with 
positive regulation and control we shall mention only a 
few abuses which were treated more definitely. 

Some of these trade abuses constituted such directly 
wasteful or misleading and deceptive practices that they 
could be made the direct subject of control by positive 
regulation. Such was the abuse of return of stale 
bread by the retailer to the baker. As long as the re- 
tailer could get full credit for stale bread returned, he 
was very careless about the quantity ordered. The 
stale bread returned on the following day and exchanged 
for fresh bread frequently amounted to from 7 to 
10 per cent, of the original purchase. The bread re- 
turned was wasted or fed to animals, and almost en- 
tirely lost for the purpose of human consumption. 
During a time of such acute wheat shortage as pre- 
vailed in the season of 1917—18 the Food Administra- 
tion could not permit the continuation of this extremely 
wasteful practice, and one of its first acts was the regu- 
lation by which bakers were prohibited from accepting 
the return of stale bread. 

The result was that the retailer became more con- 
servative in his purchases, and used his best efforts to 
dispose of all the bread purchased in any given day 
before starting the sale of the bread purchased on the 
following day. As a rule it was not a difficult matter 
for him to induce some of his customers to relieve him 
of his day old bread by a slight concession in the price. 
The elimination of the return of stale bread also re- 
sulted in such a substantial saving to the baker that 
he was enabled in many instances to reduce his price 
of fresh bread. 

Combination sales also came under the field of posi- 
tive regulations, not only on the grounds that they 
constituted wasteful practices, but also that they were 



66 DISTRIBUTION OF FOODS 

frequently designed to mislead and deceive the pur- 
chaser. 

For a long time it had been the custom of many deal- 
ers to advertise the sale of some well known article of 
a standard and practically uniform wholesale price to 
all merchants, at cost or in many cases far below cost. 
The condition of the sale was that purchaser should 
also buy a considerable quantity of other goods. 

The combination usually consisted of a number of 
articles with reference to which the dealer's cost was 
not so well known, and which on account of the vary- 
ing quality of the goods offered could not be so 
standardized in price. The consumer was thus led to 
believe that a great bargain was being offered, whereas 
an analysis of the dealer's profits on these combina- 
tions almost invariably showed that they averaged 
higher than those of other dealers where each article 
was sold on its own merits. Thus in many important 
newspapers and magazines could be found such adver- 
tisements as " Sugar at four cents per pound," " Flour 
at $8.00 per barrel," when as a matter of fact the 
wholesale price of these articles at that time ranged 
from about eight cents per pound on sugar to $12.00 
per barrel on flour. The profits of the dealer on other 
articles in the combination usually brought his average 
profit on the total sale up to a point which would not 
only cover his legitimate expense of doing business, 
but would also cover the excessive cost of the unneces- 
sary and wasteful publicity which this method entailed, 
leaving him a net margin considerably more than could 
have been obtained if each article had been sold at its 
proper value. 

Furthermore, it was apparent that if the dealer were 
permitted to make combination sales of licensed com- 
modities with other goods which were not licensed, 



TRADE ABUSES 67 

upon which profits were not so minutely regulated, it 
would be possible for the dealer to adjust his combina- 
tions so that the licensed articles would not carry more 
than a legitimate profit, but the unlicensed articles 
would carry a profit much beyond what the dealer might 
obtain without the combination, so that the extra 
profit would really accrue on the licensed articles which 
might be in active public demand, and which might have 
been purchased at far below the present cost of replace- 
ment. In this way the consumer would be robbed of 
all benefit which might otherwise accrue through the 
operation of the cost basis rule on licensed commodities, 
as the dealer could cover up his profits on the licensed 
article by exacting excessive profits on other articles 
in the combination. Furthermore combination sales 
were distinctly a wasteful practice in that they fre- 
quently induced purchasers to lay in stocks of certain 
foods that they did not want, in order to obtain what 
they did want, and the surplus so obtained was fre- 
quently not used economically, and was sometimes 
wasted. In the acute food shortage prevailing at the 
time it was the desire of the Food Administration that 
purchases of the consumer should be as small as possi- 
ble, and the combination sales offered were a distinct 
inducement to larger purchases of foods than actually 
required. 

The first step of the Food Administration toward the 
elimination of this evil was a request made to the news- 
papers and magazines to cease publishing misleading 
advertisements of the kind referred to above, and the 
houses that conducted business in this manner were 
asked to discontinue making such advertisements. The 
prompt issuance of a positive rule against combina- 
tion sales was delayed for a short time, however, owing 
to the fact that many retail dealers found no other 



68 DISTRIBUTION OF FOODS 

means of protecting their extremely limited stocks of 
sugar. A few people who were hoarding sugar went 
from store to store, buying two pounds at each store, 
and in the effort to confine sales to regular customers 
with legitimate needs, retailers sold sugar in many in- 
stances only in connection with the sale of a given 
quantity of other groceries. 

As the abuse of the privilege of making combination 
sales became more apparent it was eventually neces- 
sary to issue a positive rule forbidding them entirely, 
and such rule was promulgated November 17th, 1917. 
In order to still afford an opportunity for the retailer 
to protect his limited sugar stocks from repeaters, an 
exception to the rule permitted him to combine the 
sale of sugar with corn meal in the proportion of two 
pounds of corn meal to one of sugar. Where retailers 
took advantage of this provision, the hoarder of sugar 
found it necessary to hoard also double the quantity of 
corn meal. With the abundant corn crop in sight the 
Food Administration was anxious to force the consump- 
tion of corn meal in as large quantities as possible in 
order to save wheat, and it was thus hoped that this 
rule would not only enable the dealer to stop the hoard- 
ing of sugar, but would afford an increased consump- 
tion of corn meal. 

The Food Administration soon found it necessary to 
still further modify its combination sales rule in order 
to require the sale of wheat flour substitutes with wheat 
flour, as provided in the " Fifty-fifty " rule, which we 
will now consider. 



CHAPTER X 



The most serious crisis faced by the Food Admin- 
istration during the whole period of its operation was 
the wheat shortage of the season of 1917—18. 
Throughout the Northern Hemisphere disastrous crop 
failures occurred in 1917. Our own crop following the 
exceedingly short crop of the previous year, was only 
sufficient to meet our normal requirements for home 
consumption and seed. France and England, which 
normally produce only about one-half the wheat they 
consume, both suffered tremendous crop losses, and their 
total production was considerably less than one-third 
of their normal consumption. 

The civilian populations of France, England and 
Italy had always depended on bread as constituting a 
large part of their daily subsistence. In fact an esti- 
mate prepared by the Statistical Division indicated 
that bread constituted 67 per cent, of the total food 
stuffs consumed in France in normal times, while it 
constituted but 39 per cent, of the total diet of America. 
Even if the European peoples could have changed their 
habits so as to use substitutes instead of wheat, the sub- 
stitutes were not available for them and the total sup- 
ply of the coarse grains available for the maintenance 
of their herds was even proportionately less than that 
of wheat. 

The extreme seriousness of the food situation with 
the Allies at this time, and the character of the almost 



70 DISTRIBUTION OF FOODS 

frantic appeals which we were constantly receiving from 
across the water, may best be illustrated by two official 
cablegrams which were received, one from Painleve ad- 
dressed to the French High Commission in this country, 
and the other from Lord Rhondda, the British Food 
Controller. A translation of the French cablegram, re- 
ceived October 7th, 1917, is as follows: 

" I must call your attention to the present situation 
of our cereal supplies, which is very serious. Our crop 
does not reach 3,900,000 tons when the average crop 
of the last ten years before the war was 9,400,000 tons. 

" As you see we face an enormous deficit. With the 
amount immediately necessary for sowing, that is to 
say, 800,000 tons, and the stock for domestic con- 
sumption, there is practically nothing to save the large 
cities from starvation or to supply the needs of our 
armies from to-day onward. 

" I had already acquainted you with the very poor 
prospect of our crop. The bad weather of July and 
August have deeply aggravated the above situation. 

" We have a large deficit of our wheat imports in 
August and September. The threshing is very slow, in 
spite of our activity; we have already been obliged to 
consume our wheat imports. There is no available 
wheat to-day and we are living from hand to mouth. 

" With regards to the cereals which we are using as 
substitutes for wheat, the situation is causing us great 
anxiety. The crop of these cereals will reach only 
500,000 tons. 

" So we have decided to use all the available ships in 
North America to transport cereals prior to any other 
kind of cargo. It is urgent to obtain the same effort 
from the United States. 

" We deem that the ships transporting wheat have 



" FIFTY-FIFTY " RULE 71 

to sail prior to the ships transporting war materials 
and troops till the situation is reestablished. The help 
that the United States can give us must be 200,000 
tons a month for three months, over and above the 
quantity we transport by our own means. 

" If the United States Government agrees to our re- 
quest and decides to order some ships to transport our 
cereals, kindly let me know immediately the names and 
positions of these ships which will be communicated to 
the Wheat Executive. 

" Mr. Hoover will have to be told the situation so 
that he will increase the quantities to be delivered to 
the Wheat Export for the Allies, and we ask you to 
second Mr. Robson of the Wheat Export with your 
personal influence with Mr. Hoover. 

" At this morning sitting the ' Conseil des Ministres ' 
decided to send you this cable, asking you to settle 
this matter prior to any other as the situation is so 
extremely serious. Even go and see President Wilson 
for I must repeat that the situation is very grave not 
to say perilous. 

" Painleve." 

The cablegram from Lord Rhondda was received on 
the 24th of January, and we quote the following ex- 
cerpt : 

" Unless you are able to send the Allies at least 75,- 
000,000 bushels of wheat over and above what you have 
exported up to January first, and in addition to the 
total exportable surplus from Canada, I cannot take 
the responsibility of assuring our people that there 
will be food enough to win the war. Imperative neces- 
sity compels me to cable you in this blunt way. No one 
knows better than I that the American people, regard- 



72 DISTRIBUTION OF FOODS 

less of national and individual sacrifice, have so far re- 
fused nothing that is needed for the War, but it now 
lies with America to decide whether or not the Allies 
in Europe shall have enough bread to hold out until the 
United States is able to throw its force into the field. 
I have not minced words because I am convinced that 
the American people, if they know the truth, will not 
hesitate to meet the emergency. 

" Rhondda." 

The Food Administration replied to the latter cable- 
gram as follows: 

" We will export every grain that the American 
people save from their normal consumption. We 
believe our people will not fail to meet the emergency. 

" Hoover." 

There was an abundant surplus of wheat in Aus- 
tralia, but on account of the tremendous submarine 
losses, and the resulting acute shortage of ocean ton- 
nage, it was impossible to send ships such a great dis- 
tance without the complete abandonment of the United 
States military program for transporting troops to 
Europe, which would probably have meant the loss of 
the war. The Allied Governments effected every 
economy possible in their consumption of wheat. The 
largest proportion of substitutes was used mixed with 
the flour as could possibly be baked into a loaf, and 
their rules for milling extraction required the use as 
flour of such an extremely high percentage of the wheat 
kernel that the flour produced was of an extremely low 
grade, and had poor keeping qualities. Furthermore 
their people were put on a limited flour allowance, and 
even the soldiers in the French army were compelled to 



" FIFTY-FIFTY " RULE 73 

subsist on extremely short rations of bread of the poor- 
est quality. 

It was obvious to all acquainted with the situation 
that the peoples of the allied nations could not stand 
any further reductions in their food allowance, and 
if their efficiency in the war was to be maintained 
America had to supply them wheat. 

As America had only produced wheat sufficient for 
her own normal consumption it was clear that the neces- 
sary wheat for the armies and for the civilian popula- 
tion of the allied nations could only be obtained by in- 
ducing the people of this country to reduce their con- 
sumption in material quantities. 

Rules were passed providing for the highest milling 
extraction consistent with the safe keeping quality of 
flour. The use of edible milling wheat for animal feed 
was forbidden entirely, as was also its use in foundries 
and in making paste and similar articles. All manu- 
facturers using wheat flour in the production of various 
foods, such as crackers, breakfast foods, macaroni, 
gluten flour and many other preparations were placed 
under license, and either strictly limited in their use of 
wheat to a definite percentage of their normal require- 
ments, or were denied the use of wheat entirely. 

Appeal after appeal was made to the American 
public. The urgency of the situation and the neces- 
sity of saving wheat to win the war was set before them 
in the most forceful way possible. But the American 
people were not as yet trained in the school of self- 
sacrifice. No doubt a considerable portion of the 
people endeavored to carry out the wishes of the Food 
Administration with reference to wheatless days and 
other measures for wheat conservation, but if we are 
to judge by the statistical records of consumption; 
there were many who paid but little attention to the 



74 DISTRIBUTION OF FOODS 

appeals made. In fact there were at least two causes 
which were working toward a larger use of wheat. 

The corn crop was exceedingly late in moving. 
About 40 per cent, of it was rendered unmerchantable 
owing to an early frost, and the balance was very slow 
in curing. During the extreme cold weather and heavy 
snows of December and January, there occurred almost 
a complete breakdown in transportation facilities. 
Corn and its products did not begin to move freely till 
in February, which was at least sixty days later than 
normal. During this period corn and corn meal sold at 
the highest prices ever known, sometimes even higher 
than wheat, and this notwithstanding the fact that one 
of the largest crops of corn ever produced was awaiting 
transportation to market. As corn and its products 
furnished the principal substitutes for wheat, it is clear 
that previous to the first of February, there was little 
chance of substantial saving by the larger use of corn. 

Then, too, at this time the country was experiencing 
material prosperity apparently the greatest ever 
known. Wages for ordinary laborers had doubled or 
in some cases even trebled, and there was abundant em- 
ployment open to every member of the average family 
at wages hardly dreamed of before. 

Naturally people who had hitherto been in hard cir- 
cumstances found that this prosperity afforded them 
increased opportunity for enjoying the comforts of life, 
and the first application of the increased revenue of a 
family in such circumstances is almost invariably for 
more abundant food. 

Also there were a few who, locked within their own 
spirit of narrow selfishness, took the warnings and ap- 
peals of the Food Administration to portend an actual 
food famine later in the year, and so set themselves 
to storing away as much food as possible for their per- 



" FIFTY-FIFTY " RULE 75 

sonal use and for that of their families. Moreover, 
many farmers had not become accustomed to the guar- 
anteed fixed price for wheat. They had seen the price 
on the previous crop advance from $1.25 to $3.25 per 
bushel. With conditions now infinitely more serious 
than they had been on the previous crop, they were 
reluctant to believe that the $2.20 price would not be 
advanced before the end of the season, and they were 
inclined to hold their wheat, or to have it ground for 
their own use at the local mills, so that the total 
primary receipts of wheat for the season of 1917—18 
were only one-half what they had been the previous 
year. 

The net result of all these conditions was that by the 
middle of January it was seen that under the wheat 
saving plans as developed up to that date, this country 
would utterly fail in its promises to the allied govern- 
ments, and the issue of the war itself would thus be 
placed in the gravest doubt. 

Many remedies were suggested. The one which at 
first might have seemed the most feasible was the flour 
ration card for all consumers. But it was found im- 
possible to get such a system to working in time to be 
of substantial benefit in the present crisis, and the ex- 
pense of issuing such cards would have exceeded the 
total appropriation for the Food Administration more 
than threefold. However, at this time of greatest dis- 
couragement Mr. Hoover never lost faith in the Ameri- 
can people. He had started to effect the necessary 
conservation by inducing voluntary sacrifices of the 
public, and he was loath to admit that compulsory 
rationing was necessary, even if the law could be so 
construed as to permit it, which was doubtful. 

Moreover, in considering the scheme of compulsory 
rationing, no means were discovered of apportioning 



76 DISTRIBUTION OF FOODS 

the flour supplies among the people without giving some 
more than they needed or required, while others on the 
same apportionment would receive a wholly inadequate 
supply. The amount of flour required depended largely 
on the habits and circumstances of the people affected, 
and on the amount of substitutes customarily used, and 
there was no way to base the apportionment under a 
consumers* card system without gross inequalities which 
would have stirred up a spirit of antagonism to the 
Food Administration and have entirely broken down 
its moral influence with the public. 

However, as the appeal for voluntary saving failed to 
afford sufficient conservation it was necessary to devise 
some more positive system for controlling consumption 
of wheat flour. The wheat conservation measures, ef- 
fective February 1st, were radical in their nature, and 
provided a means by which a certain definite quantity 
of wheat flour would be available for export. In order 
to prevent a too early exhaustion of the wheat supply, 
mills were prohibited from grinding wheat in excess of 
a certain proportion of the amount which they had 
milled for the corresponding period the previous year, 
and they were further asked to reserve a certain pro- 
portion of the total flour milled, for purchase by the 
Grain Corporation for exportation to the Allies, and 
for the building up of a flour reserve. The percentage 
of the total flour output thus demanded by the Gov- 
ernment ranged from 33% per cent, to 50 per cent, as 
conditions required. 

The millers and wholesale dealers in flour after Feb- 
ruary 1st, were further required to confine their sales 
of wheat flour to their regular channels of distribution, 
and so to adjust their shipments that each customer 
would not receive more than his fair pro rata share 
of the supplies available, and in no case should any city, 



" FIFTY-FIFTY " RULE 77 

town or state receive more than 70 per cent, of the 
quality of flour sold by the licensee during the cor- 
responding period of time of the previous year. 

Wholesale dealers were prohibited from purchasing 
wheat flour in excess of 70 per cent, of the total amount 
of flour purchased during the corresponding period of 
the previous year. Both wholesale dealers and millers 
in sales to retail dealers, public eating places, or con- 
sumers, after January 28th, were required to conform 
to the " Fifty-fifty " rule, which rule provided that they 
must not sell wheat flour except when accompanied by 
the sale to the same customer of an equal quantity of 
substitutes, or unless they should secure satisfactory 
evidence that the customer had already purchased the 
required amount of substitutes, and had not balanced 
such purchases by any purchase of wheat flour. For 
the purpose of this rule wheat substitutes consisted of 
the following: 

Corn Meal Soya Bean Flour 

Corn Flour Feterita Flour and Meals 

Edible Corn Starch Rice 

Hominy Rice Flour 

Corn Grits Oat Meal 

Barley Flour Rolled Oats 

Potato Flour Buckwheat Flour 

Sweet Potato Flour 

If graham or whole wheat flour was sold the propor- 
tion could be three pounds of substitutes to five of such 
whole wheat or graham flour, or in the case of the sale 
of mixed flour, the proportion of substitutes in the 
mixture could be taken into consideration in determin- 
ing the amount of additional substitutes which were 
required to be sold to bring the ratio of total substi- 
tutes and of wheat flour to the required basis. 



78 DISTRIBUTION OF FOODS 

In sales to consumers the retailer was required to sell 
an equal quantity of substitutes to the purchaser at the 
time wheat flour was sold. The permission given millers 
and wholesalers to make sales of flour on satisfactory 
assurances that the purchaser had already on hand the 
required amount of substitutes, not balanced by any 
purchases of wheat flour, was not extended to retail- 
ers. This exception for millers was believed necessary 
as many millers and flour jobbers did not carry stocks 
of substitutes, or have facilities for doing so, and even 
if it had been in all cases possible to install facilities for 
handling substitutes it would have been most uneconomi- 
cal for many millers and flour dealers to have done so, 
for ample facilities for the distribution of substitutes 
already existed through the medium of the wholesale 
grocer. Furthermore many mills and wholesale dealers 
in flour were located in territory where little or no corn 
was produced, and it would have been impossible for 
them to lay in sufficient stocks of substitutes without 
double transportation, which could not have been al- 
lowed under the conditions of railway transportation 
then existing. 

Great care was taken to see that millers and whole- 
sale dealers did not accept any superficial assurances, 
but they were required to obtain written statements 
from their customers giving the details of the pur- 
chase of substitutes in advance of the purchase of wheat 
flour, which statements could, if necessary, be verified 
either from the retailer's own records, or from the 
records of the dealer from whom they had purchased 
the substitutes. 

Bakers were not at first included in the operation 
of this rule. In order to afford opportunity for ex- 
periments they were at this time required to use only 
5 per cent, of substitutes in bread, but on February 



" FIFTY-FIFTY " RULE 79 

24th the rule requiring the sale of substitutes also be- 
came applicable in sales to bakers. The ratio of sub- 
stitutes required for this purpose was on the basis of 
four pounds of wheat flour to one of substitutes, which 
latter the baker was not only required to use in bread, 
but he was not allowed to bake any bread that did not 
contain the required amount of substitutes. On April 
14th this proportion was changed to three pounds of 
wheat flour to one of substitutes. The list of substi- 
tutes for bakers was slightly larger than the con- 
sumer's list and by special permission it was made to 
include potatoes, on the basis of four pounds of pota- 
toes for each pound of required substitutes. 

The operation of the " Fifty-fifty " rule brought 
almost innumerable protests from all parts of the 
country. In many localities owing to delays in trans- 
portation there were practically no substitutes avail- 
able at the time the rule was promulgated. If the rule 
had been rigidly enforced at first in such districts, it 
would have entirely stopped the sale of wheat flour and 
great suffering would have ensued. Accordingly, for a 
short time, State Food Administrators were permitted 
to make exceptions to the rule and to modify the per- 
centages as might be necessary in their respective dis- 
tricts. 

Many Food Administrators under pressure from the 
frantic appeals of certain dealers went perhaps further 
than they should in granting modifications of percent- 
ages, and in allowing the sale of potatoes as a substitute 
to consumers. It was necessary that most frequent 
appeals be made to strengthen the morale of the various 
state organizations to resist the pressure brought to 
bear on them, and to insist on the literal enforcement 
of the rule. It was felt that where the rule was strictly 
enforced the urgent needs of dealers would cause them 



80 DISTRIBUTION OF FOODS 

to lay in sufficient stocks of substitutes at once so as 
to relieve any real distress. 

The Publicity Section of the Distribution Division 
sent out an urgent appeal to the entire jobbing trade 
of the country in order to enlist its immediate and whole- 
hearted support. The inconvenience to the trade and 
to the public was recognized, but it was felt that when 
the necessity for the action was clearly understood the 
trade and the general public would loyally accept the 
situation. 

Salesmen of the various jobbing houses were re- 
quested to take this matter up fully with all retailers, 
and to explain the critical nature of the situation, and 
to emphasize the necessit3 T of full compliance with the 
rule. They were asked to secure signatures immediately 
from their customers to the pledge which is illustrated 
on page 81. 

All jobbers were supplied with blanks upon which 
to report the number of pledges secured by their sales- 
men, and as soon as this report was received, each 
jobber was sent the number of Wheat Saving Posters 
necessary to enable him to supply all the retail dealers 
whose pledges he had secured. It was but a short time 
till reports indicated that practically all the retail 
dealers in the United States had signed this pledge and 
were conforming to the rule except as it might have 
been modified by temporary exceptions granted under 
authority of the State Food Administrator. The 
wheat saving poster that was distributed to the dealers 
and displayed generally throughout the United States 
at this time gave the list of substitutes, and indicated 
that the store was required to sell the substitutes named 
in equal quantities with wheat flour. The retailer could 
thus point to his poster and lay the entire responsibility 
of the order on the Food Administration, so that the 



To Serve Our Country 
we have enlisted in the 

United States 
Food Administration 



U. S. Food Administration Controlled Commodities 



Apples, dried 


Fish, fresh and 


Peas, dried and 


Beans, dried and 


frozen 


canned 


canned 


Flour 


Pork, fresh, canned 


Beef, fresh, canned 


Fruits, fresh 


and cured 


and cured 


Hominy 


Poultry 


Bread 


Lard 


Prunes 


Butter 


Milk, fresh, canned 


Raisins 


Cheese 


and powdered 


Rice 


Cooking Fats 


Molasses 


Salmon, canned 


Corn, canned 


Mutton, fresh, 


Sardines, canned 


Corn Grits 


canned and cured 


Starch, corn 


Cornmeal 


Oatmeal and Rolled 


Sugar 


Corn Oil 


Oats 


Syrup 


Corn Syrup 


Oleomargarine 


Tomatoes, canned 


Cottonseed Oil 


Peaches, dried 


Vegetables, fresh 


Eggs 


Peanut Oil 





We pledge ourselves to give 

our customers the benefit of 

Fair and Moderate Prices, 

selling at no more than a 

Reasonable Profit above Cost 

to Us 



Signed 

Member of the United States Food Administration 



81 



82 DISTRIBUTION OF FOODS 

complaining customer had no alternative other than to 
accept the situation. 

The legal status of the order requiring the retailer to 
sell substitutes with wheat flour has always been in 
some doubt. General Rule 17, to which we have previ- 
ously referred, was amended so as to cover wrongful 
dealings in any licensed food commodity. The 
" wrongful dealing " referred to could probably under 
strict construction be construed to apply only to deal- 
ing in such commodity in a way declared wrongful by 
the law itself. It was therefore doubtful whether there 
was clear legal right to cut off a retailer's supplies for 
failing to conform to this rule. In fact in normal 
times it is possible that the entire regulation would 
have fallen as not within the limits of authority granted 
by the law, but in times of war and national peril, tech- 
nicalities could not be allowed to interfere with the 
measures necessary for the safety of the country, and 
the Food Administration went ahead and enforced the 
rule, as applied equally on both the licensee and the un- 
licensed retailer. Retailers guilty of violations were 
warned, and where the violations were intentional they 
were usually given the choice of making substantial 
contributions as fines, which sums were turned over to 
the Red Cross, or of seeing their business closed entirely. 
It is of course needless to say that the retailer in prac- 
tically every case chose to pay the fine. In the few 
cases where it was necessary to enforce the penalty by 
cutting off his supplies, all licensed jobbers were found 
quite ready to comply with the request to cease supply- 
ing the given retailer with goods, even though such 
an order might not have been supported by a strict 
interpretation of the regulations. It is with great 
pride in the integrity of America's business men and 
especially of the 350,000 loyal retailers, that it may 



" FIFTY-FIFTY " RULE 83 

be said that at no time was there a tendency on the 
part of an appreciable number to question the authority 
or even the wisdom of acts of the Food Administration. 
The trade and the public generally understood that the 
Food Administration was actuated by no other motives 
than to win the war, and this common and steadfast 
purpose in the hearts of all enabled the Food Admin- 
istration to tide over many seemingly insurmountable 
obstacles. 

The wheat conservation rules adopted at this time 
limited the manufacturers of macaroni and breakfast 
foods to 70 per cent, of their use of wheat flour for 
the preceding year. Cracker bakers were required to 
use 10 per cent, of substitutes in their products and 
were also limited to 70 per cent, of their normal use of 
wheat flour. 

These rules remained in effect till October first, when 
substantial modification was made and the list of sub- 
stitutes was reduced to include only flours and corn 
meal, which were to be sold and used on the basis of 
four pounds of flour to one of substitutes. 

In spite of the many criticisms of the " Fifty-fifty " 
rule it may be said for it that it accomplished the neces- 
sary saving of wheat, and the United States during 
the season of 1917—18 was able to export to the Allies 
more than 125,000,000 bushels of wheat and flour as 
wheat, which practically all consisted in the savings of 
the American people. It is not believed that an equal 
savings could have been effected in any other way. 

Up to the time that this rule was adopted, conserva- 
tion to many individuals had been but a theory. When 
it was brought home to every consumer that he could 
no longer buy wheat flour, for his normal requirements, 
but must purchase a liberal quantity of substitutes, he 
was naturally prompted to inquire into the need of such 



84 DISTRIBUTION OF FOODS 

radical measures. The retail dealer in order to pro- 
tect himself from the criticism of his customers, was 
compelled to assume the role of personal spokesman 
for the Food Administration, and in nine cases out of 
ten a few words spoken well and to the point will have 
an effect that cannot be secured by the distribution 
of almost endless quantities of printed matter. When 
the consumer was really taught seriously to think of 
these things, he soon became of a frame of mind where 
he was quite willing to follow the directions of the Food 
Administration for the even more radical measures of 
conservation which were worked out later, on a purely 
voluntary basis. 

As already intimated, the " Fifty-fifty " rule was 
under the fire of criticism from start to finish. How- 
ever it accomplished the purpose for which it was de- 
signed, and both America and the Allied countries were 
saved from an absolute wheat famine which would prob- 
ably have meant most intense suffering to the poorer 
classes and the collapse of the war. Of the many plans 
suggested it is doubtful whether any other expedient 
could have accomplished the desired result. 

One of the most common criticisms made was that 
the rule discriminated against the housewife in requir- 
ing her to purchase flour on the basis of pound for 
pound, while allowing the baker to purchase and use 
substitutes on the basis if one pound of substitutes to 
three of flour. This naturally had a tendency to cause 
the discontinuance of bread baking in the homes, and an 
increased use of baker's bread. However, it should be 
borne in mind that there were many substitutes on the 
consumer's list which were not commonly used in bread, 
and which the rule did not require should be mixed with 
wheat flour and used in bread. Some of them could 
be used as breakfast foods, others as vegetables, and 



" FIFTY-FIFTY " RULE 85 

still others for puddings and desserts, so that the house- 
wife had abundant opportunities to use her substitutes 
in other ways than in the making of bread. Among 
such articles were rice, rolled oats, hominy, cornmeal, 
etc. The theory upon which these articles were added 
to the list was chiefly based upon the fact that they 
possessed practically the same dietetic value as wheat, 
and on the belief that their liberal use in the home 
would naturally tend to decrease the consumption of 
bread. The housewife was urged to use substitutes in 
breads so far as possible, and in some states it was con- 
sidered unpatriotic to serve any bread that did not 
contain the proportion of substitutes which the baker 
was required to use. However it is believed that 
throughout the entire period of wheat conservation, 
baker's bread on the average contained as high a per- 
centage of substitutes as that found in the bread baked 
at home. 

It was urged by many that the Pound for Pound rule 
resulted in a large waste of substitutes, as it was claimed 
that those who were able to do so bought their custom- 
ary quantity of wheat flour and wasted the substitutes 
or fed them to animals. While undoubtedly a few un- 
patriotic individuals did this, such conduct was very 
exceptional. In the first place those of the population 
who were able to afford such extravagances were the 
first to give the Food Administration their active co- 
operation in its wheat saving program. This was 
probably not due to any greater degree of patriotism 
on their part, but because they could be more easily 
reached in the educational campaign, and having a 
much more varied diet and better facilities for the prep- 
aration of new dishes they found it much easier to 
comply. On the other hand, the majority of people 
could ill afford to waste substitutes at the prevailing 



86 DISTRIBUTION OF FOODS 

prices, and the thrifty housewife on learning of the 
urgency of the situation, soon found a means of using 
up her surplus substitutes, in the preparation of many 
wholesome and appetizing dishes not used before. At 
all events, there were probably few if any instances 
where substitutes were in this way entirely wasted. 
Even if they should have been fed to chickens or hogs 
they were not lost for food, as these animals had to be 
maintained as a necessary part of the country's food 
supply. This merely meant the diversion of these foods 
into another channel almost equally useful. 

An earnest protest arose from farmers who had 
raised the coarse grains and already had on hand 
abundant quantities of substitutes which they had 
ground for their own use. In some states where this 
condition was most acute means were found to excuse 
such farmers from purchasing substitutes, on the pres- 
entation of satisfactory proof that they already had on 
hand a sufficient quantity of substitutes as food for the 
personal use of the farmer and his family. 

The amount of wheat saving effected by the opera- 
tion of the " Fifty-fifty " rule is problematical. A 
careful estimate of the normal use of all the substi- 
tutes as against the use of wheat flour showed that 
the American people normally consumed about thirty- 
seven pounds of substitutes for each 100 pounds of 
wheat flour. If all the substitutes thus forced into 
consumption by the operation of this rule had been used 
to displace wheat flour, and people had continued to 
eat their normal quantities of wheat and wheat sub- 
stitutes together, the saving in wheat effected would 
have amounted to approximately 31% per cent. Of 
course it would be unjustifiable to assume that all of 
the substitutes sold were so used, but the net results 
showed that during the operation of this rule the wheat 



« FIFTY-FIFTY " RULE 87 

saving actually exceeded 31% per cent, of the normal 
use. This was due to the fact that the American public 
was becoming educated to the idea of wheat conserva- 
tion, and even to that of actually consuming less food 
and wasting practically none. The wheatless days, the 
wheatless meals, and the entire wheatless program 
adopted in nearly all of the first-class hotels of the 
country and in many homes had a most important ef- 
fect in increasing the net total of wheat saving. Per- 
haps no single factor contributed so much to this 
change in the public attitude as the increased move- 
ment of troops to France, and the rapid increase in the 
casualty lists which brought home to every American 
the fact that the success of these various war measures 
for conservation was absolutely vital to those interests 
which were most near and dear to the hearts of all. 

As the end of the crop year approached the actual 
need of wheat saving was so great that the voluntary 
wheatless program and the voluntary ration of six 
pounds of flour per person per month had to be adopted. 
Millions of copies of wheat saving recipes were printed 
and distributed to the public. It was found that the 
trade was not only willing to distribute these leaflets 
and pamphlets, but in many cases they were reprinted 
by dealers, and the entire country was flooded with 
literature showing the need and methods for wheat sav- 
ing. In the end the American people fully justified the 
confidence placed in them by the Food Administration, 
and while the positive regulations aided and directed 
the conservation movement, the real element which did 
the work was the voluntary sacrifices of the American 
public. Without such a spirit of voluntary sacrifice, 
all of the food regulations would have failed utterly in 
tiding us over this time of great national peril. 



CHAPTER XI 

DEVELOPMENT OF THE RUIZES AND REGULATIONS 

As we have already discussed the main principles 
upon which the Food Administration based all its rules 
and regulations, we can now pass over a number of 
early changes made from time to time with mere refer- 
ence. The first pamphlet published containing general 
revision of rules was issued the 25th day of January, 
1918, and except as specifically noted the changes be- 
came effective on the 28th of the same month. 

As the principles of food control began to be applied 
to the different commodities it was soon seen, however, 
that the number of special rules was increasing so 
rapidly that it was no longer possible to publish all 
the license regulations in a single pamphlet. Accord- 
ingly, a series of pamphlets was gotten out on the fol- 
lowing scheme : " General License Regulations Number 
1 " was issued and became effective May 3rd, and cov- 
ered the general rules and regulations applicable to all 
licensees, except salt water fishermen. The special 
rules governing licensees in a given trade were published 
in a series of pamphlets running from Numbers II to 
XXVIII. Each pamphlet of special regulations was 
revised as often as fundamental changes made neces- 
sary. The following is the general scheme upon which 
these various pamphlets were issued: 



88 



DEVELOPMENT OF THE RULES 89 

Pamphlets of Special Rules 
(Issued or to be issued) 

I General License Regulations. 
II Wheat and Rye Elevators, Dealers and 
Millers. 

III Corn, Oats, Barley — Elevators, Dealers 

and Millers. 

IV Maltsters, Malt Dealers, and Near Beer 

Manufacturers. 
V Rough Rice and Rice Millers. 
VI Sugars, Syrups, and Molasses — Manufac- 
turers and Refiners. 
VII Canners and Packers — Vegetables, Sal- 
mon, Sardines, Tuna, Milk. 
VIII Dried Fruits — Packers. 
IX Cottonseed, Peanuts, Soya Beans, Copra, 

Palm Kernels, and Their Products. 
X Manufacturers of Lard Substitutes and 

Oleomargarine. 
XI Wholesalers, Jobbers, Importers, and Re- 
tailers of Non-Perishable Food Com- 
modities. 
XII Brokers and Auctioneers of Non-Perishable 
Food Commodities. 

XIII Bakers. 

XIV Manufacturers of Miscellaneous Food Com- 

modities. 

A. Products containing wheat or 

wheat flour, other than bakery 
products. 

B. Manufacturers and mixers of 

mixed flours. 

C. Sj^rup mixers. 

XV Fresh Fruits and Vegetables. 
XVI Fresh and Frozen Fish Distributors. 



90 



DISTRIBUTION OF FOODS 



XVII 


Salt Water Fishermen, 


XVIII 


Poultry. 


XIX 


Eggs. 


XX 


Butter. 


XXI 


Cheese. 


XXII 


Raw Milk. 


XXIII 


Meat Packers and Manufacturers of Lard 




— Distributors of Fresh Meats. 


XXIV 


Cold Storage Warehousemen. 


XXV 


Feedingstuffs. 


XXVI 


Directions Limiting the Use of Tin for Con- 




tainers of Various Food Products, and 




Prescribing Uniform Packakes therefor. 


XXVII 


General Orders Applying to all Public Eat- 




ing Places. 


XXVIII 


General Storage Warehousemen. 



But in the changing conditions of food control, it 
was often found that regulations which were in order 
at a given time would soon become entirely inadequate 
or unnecessary. The Food Administration never failed 
to acknowledge a mistake or change a regulation if it 
was found not to work out as anticipated. Frequently 
rules were changed even before the special license regu- 
lations covering the subject had come from the press. 
The result was that the problem of keeping all in- 
terested parties properly informed on the latest rulings 
and regulations presented no little difficulty. The 
Food Administration was slow to adopt the legal 
quibble that every one is supposed to know the law, and 
not only used every available avenue for the proper 
publicity of its rules and regulations, but when the evi- 
dence showed that the dealer accused of violating the 
law had not been properly notified, or, having been 
notified, innocently misinterpreted the rules, he was 



DEVELOPMENT OF THE RULES 91 

usually given another chance to demonstrate his will- 
ingness to comply and penalties were ordinarily in- 
flicted only in cases of intentional violations. 

All food officials, national, state and local, were sup- 
plied with loose leaf sets of the regulations, and as 
often as any change was made, the revised page was 
inserted, so that these various officials always had on 
hand a complete set of the regulations revised down 
to date. These state and local representatives of the 
Food Administration were entrusted with the duty 
of notifying the trades affected of any important 
changes. In addition there were many other avenues 
of publicity employed. 

Besides being released to the press, to the trade 
papers, and to the various state and local food officials, 
important changes in the regulations were sent directly 
to all licensees in the pamphlet form above referred to 
or in the form of announcements. In addition the Na- 
tional and Southern Wholesale Grocers' Associations, 
as well as the secretaries of all important state and 
local associations, were kept in constant touch with all 
the changes that could in any way be of interest to 
their members, and their prompt and hearty coopera- 
tion, and the personal influence of the salesmen of job- 
bing houses were found to be of most material aid in 
disseminating information. 

Important regulations affecting unlicensed retailers 
were printed and either mailed direct or distributed 
through the various State Food Administrators, or if 
necessary, copies were sent out through the mail of 
wholesale grocers so that with these multiple avenues 
of information few could plead ignorance of the rules. 

Having already discussed at some length the more 
important provisions of the regulations and early 
amendments, we shall now pass briefly over a number 



92 DISTRIBUTION OF FOODS 

of minor changes and announcements occurring 
previous to April 6th, 1918, when the "Maximum 
Margins " for wholesalers were announced. We shall 
refer only to such changes as) directly affected the 
wholesale and retail food trade or fixed the basic price 
of important staples which they handle. 

Early in November, 1917, all distributors of sugar 
were notified that they should not sell any sugar to 
confectioners or manufacturers of gum, cordials, 
syrups or ice cream in quantities more than sufficient 
to give such manufacturers, including the stocks on 
hand, 50 per cent, of the amount of sugar they had 
used during the corresponding period of the previous 
year. After January first, 1918, the rule was changed 
to permit such manufacturers to use 80 per cent, of 
their normal requirements up to May 15th, 1918, at 
which time the sugar certificate plan affecting manu- 
facturers went into effect. 

December first the packing of wheat flour in less 
than % barrel containers was prohibited. This rule 
however did not prevent the retailer from selling 
quantity to suit in bulk to consumers, and the rule was 
rescinded entirely a few months later. 

On December 4th, 1917, the Food Administration 
on account of the radical advance in the price de- 
manded for Alaska canned salmon fixed maximum 
prices which might be charged by packers of salmon 
f . o. b. coast shipping point as follows : 

Red Salmon. ...... $2.35 per doz. Number one tins. 

Medium Reds $2.25 per doz. Number one tins. 

Pink Salmon $1.65 per doz. Number one tins. 

Chums $1.60 per doz. Number one tins. 

On the 10th of December an announcement was made 
by the Food Administration to the effect that sugar 



DEVELOPMENT OF THE RULES 93 

should not be sold to consumers in towns and cities in 
excess of from two to five pounds at one time, or to 
consumers residing in rural communities in quantities 
in excess of from five to ten pounds, and that sugar 
should not be sold to retailers in quantities in excess 
of 300-1000 pounds at one time. Flour should not be 
sold to customers in towns and cities in quantities in 
excess of Yg to *4 barrel, and to those residing in the 
country in quantities in excess of from ^ to ^ barrel. 
The various State Food Administrators were given 
authority to modify these rules where their application 
to those residing at a great distance from market would 
work a special hardship. At the same time the adver- 
tising of flour or sugar in any way. which would have a 
tendency to increase consumption was prohibited. 

December 12th an advance of ten cents was author- 
ized in the basic price of beet sugar, thus bringing it 
up to $7.35 per 100 pounds. This was made to bring 
the price of beet sugar in line with that of cane sugar 
which had to be advanced to this figure owing to the 
increase in the freight rates from Cuba. 

A notice issued on December 15th gave special per- 
mission to all canners of dried beans to pack 25 per 
cent, of their normal output up to the 1st of March, 
1918. 

Milling rules which became effective December 25th, 
provided a minimum milling extraction of not less than 
196 pounds of flour from 264 pounds of wheat weigh- 
ing 58 pounds per bushel, and prohibited the removal 
of more than 5 per cent, of the flour so manufactured. 
Differentials were established for a maximum extraction 
on lower grades of wheat. The miller was required to 
fix his basic price for flour each day, and was not per- 
mitted to vary that price more than 25 cents per barrel 
between customers, freight and quantities sold taken 



94 DISTRIBUTION OF FOODS 

into consideration. All invoices were required to show 
the bulk mill price. 

Flour package differentials were established at this 
time on the basis of flour in 98 pound cotton or jute 
bags. Flour in all other containers was to be sold at 
given differentials over or under this basic price, de- 
pending on the average cost of the containers used. 
These package differentials had to be changed from 
time to time to meet market changes in the cost of con- 
tainers, but the fact that such a scale of differentials 
existed prevented any excessive profits on any par- 
ticular size of package. 

It was also necessary at this time to revise the 
margins permitted for the manufacture of mill feeds 
of which there was a most acute shortage at this time. 
The maximum price which might be charged by the 
mills for such feeds was fixed on the following basis : 

( 

Bran should be sold at a price per ton of not more 
than 38 per cent, of the cost of one ton of wheat 
at the mill door. 

Shorts or standard middlings not more than $2.00 
over bran. 

Mixed feed middlings not more than $4.00 over bran. 

Flour middlings not more than $9.00 over bran. 

Red Dog middlings not more than $15.00 over bran. 

The License Proclamation of January 10th, brought 
under the licensing system, among others, manufactur- 
ers and distributors of practically all feeds, brewers, 
importers and distributors of copra, palm kernels, palm 
oil, and peanuts, manufacturers of tomato catsup and 
all other tomato products, manufacturers of alimentary 
paste, and of all other products using wheat or wheat 
products for their raw material. 



DEVELOPMENT OF THE RULES 95 

Among other amendments promulgated at this time 
was the requirement for uniform sizes for packages of 
corn meal, corn grits and hominy, effective April first. 
General Rule 25 effective February 1st, provided that 
cold storage goods offered for sale should be labeled 
" Cold Storage," and the removal of such labels was 
prohibited. 

Bakers with a baking capacity of 10 barrels of flour 
monthly had been placed under license by proclamation 
of November 7th. This was changed by a supplemental 
proclamation December 10th to include all bakers with 
a capacity of three barrels per month. 

The rules affecting bakers, effective February 1st, 
provided that they must immediately begin to use not 
less than 5 per cent, of substitutes in their bread and 
rolls, and not less than 20 per cent, beginning Feb- 
ruary 24th, except that graham and whole wheat flour 
could be used without substitutes. In their use of 
wheat flour for all other products they were limited 
to 70 per cent, of the amount that they had used the 
preceding year. Bakery products containing the per- 
centage of substitutes mentioned below could be ad- 
vertised and sold under the term " Victory Bread," 
" Victory rolls," etc. 

Class 1, bread and rolls, 20 per cent. 
Class 2, sweet yeast dough goods, 33% per cent. 
Class 3, (a) crackers, 33% per cent, 
(b) biscuits, (cookies) 

and ice cream cones, 33% per cent. 
Class 4, (a) cakes, 33% per cent. 

(b) pies, 33% per cent. 

(c) fried cakes, 33% per cent. 

(d) pastry, 33% per cent. 

Class 5, batter cakes and waffles, 75 per cent. 



96 DISTRIBUTION OF FOODS 

The use of shortening in bread and rolls was limited 
to vegetable shortening or compounds containing not 
more than 15 per cent, of animal fats, and the amount 
of shortening used was limited to two pounds for each 
196 pounds of flour. The amount of sugar used was 
limited to six pounds for each 196 pounds of flour. 
Neither sugar nor shortening could be added during 
the process of baking. Milk might be used as an 
ingredient, but the baker was not permitted to charge 
more for his bread on account of the Use of milk. 
Bread was limited to standard size loaves of one pound, 
one and one-half pounds, or even pound weights above. 
This rule however was amended February 21st, so as 
to allow the baking of bread in loaves of three-fourths 
pound each. On April 14th the bakers' rules were 
still further amended so as to require the use of 25 
per cent, substitutes in bread and rolls, 15 per cent, 
in crackers and 33% per cent, to 66% per cent, in 
other bakery products. There were also definite 
limits placed on the amount of shortening which might 
be used. 

By proclamation of the President of January 30th, 
importers and distributors of green coffee were placed 
under license. Stocks of coffee were limited to require- 
ments for 90 days based on pre-war purchases. A 
maximum price of 8% cents per pound was fixed for 
coffee on the New York Coffee Exchange for February 
delivery basis number seven type, with other grades 
at the recognized differentials. Trading in more dis- 
tant options was limited to a maximum price of $.0015 
per month above the price so set. 

Since the beginning it had been understood that the 
Food Administration would look with disfavor on any 
sales of flour by jobbers at a margin of profit exceed- 
ing $.50 to $.75 per barrel. Owing to the fact how- 



DEVELOPMENT OF THE RULES 97 

ever that a few merchants had taken advantage of the 
fact that no formal announcement had been made 
respecting this matter, and were exacting profits con- 
siderably in excess of the amount mentioned, it became 
necessary to issue a formal statement early in February 
that the Food Administration would consider any sales 
of flour at wholesale in excess of the margins named as 
prima facie unreasonable. The same circular 1 fixed 
the maximum margin for retailers at from $.80 to 
$1.20 per barrel, except that where the retailer broke 
bulk and sold flour by the pound he might ask a profit 
of not to exceed one cent per pound. 

A proclamation of the President of February 21st, 
changed the basic price of wheat from $2.20 Chicago 
to $2.26 Chicago, which change was made necessary by 
the advance authorized in freight rates. This entailed 
of course a slight adjustment of flour prices and those 
of wheat mill feeds all along the line. 

By the milling rules effective March first, all manu- 
facturers of food products excepting bread and rolls 
were limited to 70 per cent, of the amount of wheat 
they had used the preceding year. The manufacture 
of gluten flour was stopped entirely on the ground that 
it constituted a wasteful practice. At this time also an 
order was issued to the mills prohibiting the further 
extraction of 5 per cent, of the 100 per cent, flour 
manufactured under the minimum extraction require- 
ments. This meant the passing for the time being of 
all patent flours. 

We now desirfe to give a slightly more extended state- 
ment to " Maximum Margins " promulgated to the 
trade April 6th, 1918. 



CHAPTER XII 

MAXIMUM MARGINS WHOLESALE AND RETAIL 

One of the fundamental principles of the Food Con- 
trol Act, and of the Rules and Regulations was that 
distributors should not exact more than a reasonable 
profit for their services. The word " reasonable " 
when used in legislation is one which up till this time 
few if any governmental administrative bodies had 
attempted to interpret before the commission of the 
offense. This has made the interpretation of all such 
legislation on the part of the individual largely a matter 
of conscience or fear, and in the pursuit of ordinary 
business transactions the individual is always handi- 
capped and restricted in his course of conduct through 
the uncertainty attached to the interpretation of this 
word. 

The Food Administration undertook to assist the 
trades by defining what in its view the word " reason- 
able " meant when applied to the permissible profits of 
the dealer. As applied to the licensed " non-perish- 
ables " it had held that reasonable profits in war time 
should not exceed the profits which had been made on 
an average by the same merchant in pre-war times, on 
an even market under freely competitive conditions. 
The average of the three years preceding the European 
war was taken as a basis. 

This was as near as it was felt at first that it was 

possible to define the word. But such definition left 

the trade almost as much at sea as it had been in the 

98 



MAXIMUM MARGINS 99 

first place, and there was positively no definite standard 
for enforcing the regulations without an exhaustive 
study of the books of every merchant. Another ob- 
jection to this interpretation was that some merchants 
had not been in business during the three years pre- 
ceding the war, and they were subject to such indefinite 
standards as might have been set by others in the same 
line of business similarly situated. 

The Food Administration had determined that there 
should be no speculative profits during war time, and 
it was ruled that the profits that might be exacted now 
should not exceed those which the merchant had en- 
joyed previous to the war " on an even market " In 
other words, if the merchant had made a profit on his 
stock due to a rising market during the pre-war period, 
he could not take such a profit into consideration in 
figuring the profits which might now be allowed. As 
a matter of fact it was utterly impossible to establish 
in any particular case what had been the pre-war non- 
speculative profit, for all profits previous to the war 
had been subject to the constantly changing market 
conditions, and in the case of a few of these commodi- 
ties, such as flour and sugar, the dealer had depended 
almost entirely on these market changes to afford him 
an opportunity to make a satisfactory profit, so that 
at any one time the difference on these items between 
the manufacturers' selling price and the jobbers' sell- 
ing price rarely if ever represented the actual cost of 
performing the distributive service. As the Govern- 
ment was especially anxious to keep down the prices 
of flour and sugar for its effect on the public morale, 
and as the basic prices of both these articles had been 
fixed, the trade was willing to accept the definite 
limitations of profit which were announced early in the 
history of the Food Administration. The maximum 



100 DISTRIBUTION OF FOODS 

margins named were in almost every case below the 
actual cost of doing business, but as they represented 
more than the pre-war non-speculative profits, the trade 
was quite willing as a rule to agree to them. A few 
complained that if they were to be deprived of their 
speculative profits upon which they had hitherto de- 
pended, they should now be permitted to make a profit 
on these important staples at least equal to the cost 
of doing business, but the desire of the trade generally 
to cooperate was so keen that these few were quickly 
over-ruled. 

To provide a profit sufficient to cover the enormous 
increase in the cost of doing business since pre-war 
times, the dealer was permitted to base! his present 
profits on his pre-war percentage of profit. That 
meant that if he made 10 per cent, on a given article 
before the war, he might make 10 per cent, on the same 
article now. As the prices of all commodities had ad- 
vanced, the absolute profit in cents to the dealer would 
thus be considerably greater than in pre-war times. 
This extra profit was assumed to be sufficient to cover 
the increased investment and cost of doing business. 

The trade and the Food Administration soon be- 
came dissatisfied with this interpretation of the rule. 
For the trade there was no means by which the dealer 
might absolutely assure himself that he was within the 
law. For the Food Administration there was no 
definite standard for enforcing the law. The honest 
and conscientious merchant, in order to be doubly safe, 
reduced his profits to the point where it hurt, but his 
more unscrupulous competitor took a chance on the 
doubt, and exacted all that he dared. When such a 
dealer was called to account it was soon found that the 
pre-war profits standard was almost as unsusceptible 
of accurate analysis as the word " reasonable " itself. 



MAXIMUM MARGINS 101 

The fundamental weakness of this interpretation was 
that there was no such thing as " average pre-war 
non-speculative profits," for all average pre-war profits 
took into consideration and included profits on market 
changes which were taking place all the time, and it 
was impossible to dissociate the average speculative 
from the average non-speculative profits. 

It should not be inferred that the rule was found 
impossible to enforce. Clear cases of profiteering were 
easily detected by means of the monthly reports or 
through inspectors, and the guilty ones were punished, 
but there were no means by which an action could be 
supported against a merchant who was not exacting 
profits which were clearly exorbitant. 

Gradually the sentiment drifted toward the estab- 
lishment of definite maximum margins on the more im- 
portant staples. The greatest fear that the Food Ad- 
ministration entertained in this respect was that there 
would be a tendency of all merchants who were already 
obtaining less than the margins to be announced, to 
increase their profits at once to the basis of these 
margins, which in the end would have meant a higher 
cost to the consumer. As the cost of doing business 
varied greatly in different localities and among 
different classes of merchants of the same locality, a 
definite margin which might be reasonable for one mer- 
chant might afford an excessive profit for another, or 
be wholly inadequate to cover the costs of a third. 
Accordingly, it was decided that notwithstanding the 
margins to be announced, the dealer should still be sub- 
ject to the pre-war rule, and that a higher and lower 
maximum margin should be established on each item. 
The higher margin was to be the maximum for the job- 
ber with the higher costs, and the lower margin to be 
the maximum for the jobber with the lower costs. 



102 DISTRIBUTION OF FOODS 

Neither margin was to be regarded as a minimum in 
any instance, as it was desired that competitive con- 
ditions should be allowed to bring down the margin as 
low as possible, regardless of the maximums established. 
In determining the amount of margins to be allowed, 
expert men in the Division who were acquainted with 
every angle of the wholesale and retail business spent 
a great deal of most careful investigation and study. 
The first announcement was made April 6th and ap- 
plied only to wholesalers' margins, as the proper 
margins for retailers had not been worked out at that 
time. We quote below the margins announced on June 
6th rather than those of April 6th as the latter contain 
a few changes. The advance in the sugar margins on 

" Maximum Margins on Sales by Wholesalers 
to Retailers 

Commodities Maximum Margins 

Sugar 15c-35c per 100 lbs. 

Wheat flour 50c-75c per bbl. 

Lard, lard substitutes, bulk (pkgs. of 50 lbs. 

or over) l%-2c per lb. 

Standard hams, bacon lc-2c per lb. 

All flour (except wheat) 1 

Lard and lard substitutes, in pkgs. (less I Q ino/ 

than 50 lbs.) f b " lu /° 

Condensed, evaporated milk J 

Rice, hominy, grits, oatmeal, rolled oats,] 

cornmeal, beans, in bulk (pkgs. of 25 f 10-12%% 
lbs. or over) 

Rice, cornmeal, hominy, grits, oatmeal, self- 
rising and prepared flour, and rolled 
oats, all in pkgs 

Corn oil, corn syrup sugarhouse syrup, 
mixed sugar and corn syrup, and cotton- 
seed oil ^ 

Standard and extra standard licensed canned 
peas, tomatoes, corn and canned dried 
beans, and pink, chum and red salmon 
and all domestic sardines 

All dried prunes, apples, peaches, raisins . . d 



MAXIMUM MARGINS 103 

June 6th to a maximum of $.15 to $.35 per 100 pounds 
still left this commodity to be handled by jobbers at 
considerably less than the average cost of doing busi- 
ness. 

" Any gross margins above delivered cost upon sales 
in unbroken cases to retailers in excess of the foregoing 
margins will be regarded as prima facie evidence of a 
violation of the statute and the rules. 

" In case the licensee breaks original packages he 
may add to his cost the actual cost of such repacking, 
in no case to exceed 5 per cent. 

" It should be noted that the above differentials are 
maximum margins which must not be exceeded by the 
wholesaler and apply to the commodities specified. 

" Licensed commodities not covered by the above 
margins shall not be sold at a margin above delivered 
cost to the wholesaler (average purchase price plus 
freight to public railway terminal in jobber's city or 
town) of the particular goods sold which will yield any 
greater profit than the dealer customarily enjoyed on 
the same commodity in the Pre-War Period on an 
Even Market Under Freely Competitive Con- 
ditions. " 

Under the announcement of April 6th, the rule limit- 
ing profits to a pre-war basis was still held to apply 
to all licensed articles, whether the margins had been 
fix^d or not, while in the announcement of June 6th, it 
will be noted that the pre-war rule was only applied 
to licensed commodities upon which no specific margins 
had been established. 

It was a great relief to the trade to have a definite 
standard of margins, so that all could feel sure that 
their competitors were being held to the same rules as 
applied to themselves. However the rule that profits 



104< DISTRIBUTION OF FOODS 

exacted should be reasonable was not changed, and any 
jobber could be called to account for exacting any 
margin which afforded an unreasonable return for the 
service performed even though the profit on the trans- 
action was less than the maximum prescribed. 

An examination of the monthly reports of jobbers 
indicated that instead of causing an average increase 
in jobbers' margins, the effect of the announcement 
was a material reduction in average profits, and the 
standard set was sufficiently definite so that compliance 
with the law was rendered practically uniform. Under 
the operation of this new rule it was soon found pos- 
sible to do away with the jobbers' monthly reports, 
which system had proved a matter of considerable 
trouble and expense to licensees, as well as entailing a 
vast amount of work for the Food Administration in 
the examination of such reports. Compliance with the 
rules was assured by a, system of close supervision 
through inspection, and by the submission of special 
reports whenever circumstances demanded. 

On May 24th the cost basis rule was changed so 
that in figuring the maximum margins to be allowed, 
the licensee should use as a basis the average cost of 
all lots of goods of the same size and grade, rather 
than the cost of the particular goods sold. A definite 
method of averaging and of records for same was pre- 
scribed so that no profiteering could take place under 
the cloak of averaging. The operation of the averag- 
ing rule had a tendency to stabilize prices, and proved 
no doubt a distinct benefit to the consumer as well as a 
convenience to the trade. 

The announcements of April 6th and of June 6th 
also contained a clear statement of the kind of resales 
which would be considered justifiable between merchants 
in the same class of trade. In no case did these rules 



MAXIMUM MARGINS 105 

allow a resale unless a distinct economic service was 
performed, and even in such cases the profit of both 
buyer and seller was limited so that the two profits 
woulc{ not represent more than a reasonable return 
for the actual service performed. On accommodation 
sales or " pick-ups," the margins of both buyer and 
seller combined could not exceed the maximum which 
would have been allowed either one on a single transac- 
tion. 

The margins announced on June 6th remained in 
force for the balance of the year, with one or two 
slight alterations as follows : 

On November 4th the wholesalers' margin on flour, 
after a most careful investigation of the entire subject, 
was increased to a maximum of $.60 to $.90 per barrel. 
Buckwheat flour which was not licensed at the time the 
maximum margins were first promulgated, by special 
announcement to the trade was placed in the class of 
prepared and package flour November 8th, and a whole- 
saler's maximum margin of Sfyfa cents per pound on 
oleomargarine and butter substitutes was announced on 
December 5th. 

It should be noted that the margins established were 
not final definite standards, but merely prima facie 
evidence of what the Food Administration would con- 
sider reasonable. As applied to any given case the 
individual merchant was compelled to show by the 
burden of proof that any profit which he obtained in 
excess of the announced margins was reasonable. Few 
merchants cared to undertake to do this so that in 
the practical operation of the plan, the announced 
margins had the same effect as if they had been estab- 
lished as definite standards, not to be exceeded in any 
instance. 

It was even with greater hesitancy that the Food 



106 DISTRIBUTION OF FOODS 

Administration moved to establish retailers 5 margins, 
as the difference in the cost of doing business under 
varying conditions, and in different parts of the 
country, varied even more radically than in the jobbing 
trade. The control of retail prices was therefore 
largely left to local food administrators and to price 
interpreting boards which we will discuss in the next 
chapter. 

However it was seen that there must be some basis 
for the positive enforcement of the regulations in case 
of violation. Pre-war non-speculative profits were 
even more difficult for use as a standard by retailers 
than for wholesalers, as few of the former had books 
by which any statement of alleged pre-war profits 
could be verified. It was clear that the margins to be 
announced would have to be materially higher than 
those actually charged by retailers in some localities or 
the gravest injustice would be done those dealers with 
higher costs. 

An immense amount of time and careful thought was 
devoted to this important question. Retail margins 
were early established on sugar and flour, and from 
time to time other articles were added to the list upon 
which definite maximum margins were fixed. Among 
these articles were butter, eggs, butter substitutes, and 
cheese. Finally on November 7th a definite list of 
maximum margins was announced for retailers which 
we quote below. 

Maximum Margins on Sales by Retailers to 
Consumers 

(Issued November 7, 1918) 

The Food Administration has determined that any 
sales of food commodities at a gross margin above de- 



MAXIMUM MARGINS 107 

livered cost in excess of those indicated below are un- 
reasonable, and will be regarded as prima facie evidence 
of a violation of the statute and of the above regulation. 
Percentage may be calculated on the selling price. 
Delivered cost shall mean the cost at the railroad, 
steamboat or other terminal in the retailer's town. 
Where the retailer is not located in a railroad or 
steamboat town he may include any hauling charge in 
the delivered cost. 

The lesser margin indicated is not a minimum margin, 
but is a maximum margin for those whose cost of doing 
business is less, such as stores which do not perform the 
services of credit and delivery. Any change from the 
pre-war practice in cash discount terms or other 
changes which tend to or result in increasing the margin 
of profit allowed will be dealt with as an unfair prac- 
tice. 

The retailer may have the benefit of fractional costs 
on each transaction ; that is, he may calculate the total 
charge to a customer on any transaction as if fractional 
costs were not allowed, and if the result is a fraction, 
he may add thereto such fraction of a cent as may be 
necessary to make a price in even cents. The follow- 
ing table gives an example in the case of eggs, using 
the cash and carry margin of seven cents per dozen : 



Amt. of Sale 


Cost 


Margin 


Total 


Fraction Maximum 
Added Selling Price 


1 doz. 

2 doz. 

3 doz. 


.46% 

.92 y 2 

1.38% 


7t 
14tf 
21tf 


.53% 
1.06% 
1.59% 


% .54 
% 1.07 
% 1.60 



MAXIMUM MARGINS 

Victory Flour, Original Mill Pkgs., V 2 bbl. quantities 

and more $1.00 to $1.20 per bbl. 

Victory Flour, Original Mill Pkgs., % bbl. quantities 

and less I.35 to 1.60 " " 

Victory Flour, Broken Mill Pkgs .01^ " lb. 

Wheat Flour, Original Mill Pkgs., % bbl. quantities 

and more 1.00 to 1.20 " bbl. 



108 DISTRIBUTION OF FOODS 

Wheat Flour, Original Mill Pkgs., *4 bbl. quantities 

and less $1.35 to $1.60 per bbl. 

Wheat Flour, Broken Mill Pkgs .01* " lb. 

Barley Flour, Original Mill Pkgs 18 to 22% 

Barley Flour, Broken Mill Pkgs .01| " lb. 

Rye Flour, Original Mill Pkgs 18 to 22% 

Rye Flour, Broken Mill Pkgs. . .01* " lb. 

Corn Flour, Original Mill Pkgs 18 to 22% 

Corn Flour, Broken Mill Pkgs .01* " lb. 

Rice Flour 18 to 22% 

Corn Meal, Bulk .01* " lb. 

Corn Meal, Original Mill Pkgs 18 to 22% 

Hominy 18 to 22% 

Sugar, all kinds in Bulk .01* " lb. 

Sugar, all kinds in Refiners' Original Pkgs .01 " lb. 

Evaporated Milk, Unsweetened 18 to 22% 

Oat Meal and Rolled Oats, Bulk . .01* " lb. 

Oat Meal and Rolled Oats, Original Mill Pkgs 20 to 25% 

Rice 20 to 25% 

Beans, White or Colored 20 to 25% 

Starch, Edible 20 to 25% 

Corn Syrup, Tins 20 to 25% 

Canned Corn, Peas, and Tomatos — Standard Grades. 25 to 30% 

Canned Salmon Chunks, Pink and Red 25 to 30% 

Canned Sardines, Domestic. 25 to 30% 

Dried Fruit, Raisins, Prunes, and Peaches 25 to 30% 

Lard, Pure Leaf, Bulk 5 to 60 per lb. 

Lard, Pure Leaf, Tins 18 to 22% 

Lard Substitutes, Bulk 5 to 60 per lb. 

Lard Substitutes, Tins 18 to 22% 

Breakfast Bacon, Whole Pieces 6 to 70 per lb. 

Heavy Bacon, Whole Pieces 5 to 60 " " 

Hams, Smoked Whole 6 to 70 " " 

In quoting sliced ham and bacon add usual differential to cover actual 
shrinkage. 



" Original Mill Packages" as used above means where retailer sells prod- 
uct in the same mill container as received by him. 

" Broken Mill Packages " means when retailer removes contents from 
original mill packages and sells in smaller quantities. 

By other special regulations the retailers' maximum margins have also 
been fixed in accordance with the following list: 

Potatoes, White or Irish 25 to 30% 

Onions 25 to 30% 

Eggs (whether sold in carton or not) 7 to 80 per doz. 

Butter 6 to 70 " lb. 

Butter Substitutes, Oleomargarine, Nutmargarine, etc. 5 to 60 " " 
Cheese, American, Cheddars, Twins, Flats, Daisies, 

Long Horns, and Y. A.'s 7 to 80 " " 

Retailers were particularly warned that these 
margins were maximums only, and should in no case be 
construed to be minimums. Furthermore it was 
pointed out that where retailers customarily sold any 
of the commodities mentioned for less than the specified 



MAXIMUM MARGINS 109 

margin they would not now be permitted to increase 
their profits beyond those normally enjoyed. 

The results indicated that the establishment of maxi- 
mum margins for retailers effected not only a stabiliza- 
tion of retail prices, but had a noticeable tendency to 
reduce average retailers' profits, as undoubtedly a few 
dealers had been taking advantage of the absence of 
definite standards for the control of profits by exacting 
margins in excess of those named, and experience 
further indicated that the establishment of these stand- 
ards did not eliminate competition in reducing profits 
in many instances to a point considerably below the 
margins established. 



CHAPTER XIII 

PRICE PUBLICATION 

One of the most important means by which it was 
hoped to control the profits of the unlicensed retailer 
was through the general publication of fair prices in 
the local newspapers throughout the United States. 

Early in October, 1917, the Illinois Food Adminis- 
trator, Harry A. Wheeler, with the aid of Mr. Gard- 
ner, his assistant, brought forth the plan of publication 
of prices on staple food commodities. After a meeting 
of wholesalers and retailers representing the different 
kinds of food distributors in Illinois, the following plan 
was evolved: 

From information to be given by the wholesale dealers 
they would arrive at the fair average cost to the re- 
tailer of a few of the principal staples, and then with 
the voluntary cooperation and aid of a committee of 
the retail trade, agreement would be made on a fair 
retail selling price, based on the cost so ascertained. 
Publicity was then given to the price which the retailer 
pays and to the price at which he should sell. The 
consumer was thus fortified with the knowledge of what 
should be the fair price of the article to be purchased. 

On November 24th, 1917, after several conferences 

in Washington, a similar plan was recommended to all 

Federal Food Administrators, whereby both the 

retailer's cost and the price to the consumer should be 

published. This operation was not to be construed 

as the fixing of prices, as the law did not warrant that. 

110 



PRICE PUBLICATION 111 

In reality it was to be simply an understanding with the 
retail distributors whereby they voluntarily agreed 
upon a fair and reasonable margin for the sale of 
certain licensed foods. Price lists as published usually 
consisted of two prices, one intended as a maximum 
for the retailer with the higher cost and the other to 
operate as a maximum for the retailer performing less 
service, or with lower costs. 

On May 17th, 1918, the above idea was changed 
somewhat. It was decided that the publication should 
be sufficiently wide to allow all the consuming public 
to be reached and the plan for the organization of 
local committees or interpreting boards was as follows : 

In every county or other community for which 
prices were to be published, there should be appointed 
a Price Interpreting Board consisting of representa- 
tives of the wholesale grocers, retailers and consumers. 
The County Administrator or his representative should 
act as Chairman of this Board. It was suggested that 
there be on this Board retailers who would represent 
each class of that business, such as " Cash and Carry " 
stores — small stores — " Credit and Delivery " stores, 
etc., and that it would be preferable to have each class 
of merchants choose its own representatives, thereby 
tending to make each retailer feel a proper respon- 
sibility in conforming to the selling prices to which his 
representative was a party in the making. 

These Price Interpreting Boards were assisted in 
their work with a list of suggested margins. Previously 
these margins of profit were left to the interpretation 
of the committee of its view of a normal pre-war profit, 
with no guidance from the Food Administration except 
the presence and advice of its representative, and the 
specific margins which had been announced on flour and 
sugar. Under the new plan, the Price Interpreting 



112 DISTRIBUTION OF FOODS 

Board had a list of maximum margins which the United 
States Food Administration suggested as fair, these 
margins being added to the cost as found by the Board, 
and the resulting prices published. These published 
prices were to be construed as the fair price for which 
any particular food commodity should be sold and this 
price could not be exceeded by the retailer without an 
explanation of the reason therefor. There were to 
be two prices published; the lower price was to be the 
maximum for " Cash and Carry " stores, and the higher 
price to be the maximum for " Credit and Delivery " 
stores. 

Finally on November 7th, 1918, after consultation 
with different retail organizations throughout the 
country, and with numerous Federal Food Adminis- 
trators, among whom we should especially mention 
Howard Heinz of Pennsylvania, the Food Administra- 
tion published the list of retail margins to which we have 
already referred, as positive Rules and Regulations and 
which were to be the future guide for price interpreta- 
tion. 

On account of the multiplicity of duties of Federal 
Food Administrators, and the labor involved in the 
work of price interpretation, special men were ap- 
pointed in practically every state to have charge of 
this work. They appointed local committees to the 
number of over 1200, such committees meeting at least 
once a week to interpret prices applicable to their par- 
ticular locality, using the revised list of margins as the 
maximum allowed. These prices were then published 
in local newspapers under the heading " Fair Prices 

for County." Each committee was asked to send 

in the prices current in its locality to the United States 
Food Administration, Statistical Division, where the 
compilations were made. 



PRICE PUBLICATION 113 

The work of these committees was checked, and ac- 
curate knowledge of the prices actually paid by con- 
sumers in the United States was obtained by means 
of reports which were sent in by volunteer price 
reporters who were obtained through the aid of loyal 
women's organizations early in the history of the Food 
Administration, and their reports were sent in to the 
Statistical Division, giving a list of the prices actually 
paid for staple commodities, and the names and ad- 
dresses of the stores from which goods were purchased. 
The compilations made from these figures served as a 
fairly accurate barometer of the fluctuations of food 
prices, and, when compared with the compilations made 
from figures sent in by Fair Price Committees, it was 
found that the consumer was paying practically what 
the Fair Price List said he should pay. In other words, 
the retail grocer through his patriotism was following 
the prices set forth by his local committee, and the con- 
sumer was receiving the benefits therefrom. 

In order to impress more forcibly upon the retailer 
the necessity of following the prices as interpreted by 
local committees, a pledge poster was sent out by the 
Retail Section of the Food Administration which when 
displayed by the retailer pledged him to abide by the 
latest list of fair prices issued by his local committee. 
This pledge upon being signed by the retailer and hung 
in his store, gave the consumer confidence that the 
dealer had agreed to abide by the prices set forth in 
the Fair Price List. The effect upon the buyer was 
to instill confidence that he was not being overcharged, 
and that nobody was obtaining an exorbitant profit at 
his expense. 

The results obtained seemed to indicate, beyond all 
questions of doubt, that price interpretation served its 
purpose as a means for the protection of the consumer. 



114 DISTRIBUTION OF FOODS 

Compilations of statistics and reports indicated that 
the prices which Price Interpreting Committees said 
were the maximum to be charged, when checked with the 
figures compiled from the two thousand odd price 
reports giving the prices actually paid, had been 
stabilized to such a degree that the difference in freight 
constituted practically the only difference between 
average prices paid by consumers in different parts of 
the United States. From these compilations accurate 
knowledge could be obtained of the average price of 
any commodity in any section of the country. 

The success of the plan was also indicated by taking 
prices paid for the list of commodities, as shown by 
consumers' reports from those states where price inter- 
pretation had not been carried out to any great extent, 
and comparing them with average prices in a neighbor- 
ing state where the plan was in force, and it was found 
practically without exception that the prices in the 
States where the plan was in operation were lower. 

The number of complaints from consumers was re- 
duced by over 75 per cent, as a result of this work, and 
the idea that the consumer was protected and that the 
retailer was limited to a fair margin of profit by the 
United States Food Administration produced a 
psychological effect upon the mind of the public, the 
value of which, during the period of upheaval, cannot 
be measured. 



CHAPTER XIV 

THE SUGAR CERTIFICATE PLAN 

It will be remembered that beginning with January 
1st, 1918, all manufacturers of candy, soft drinks, 
chewing gum, etc., had been placed on an allowance 
of not to exceed 80 per cent, of the amount of sugar 
they had used the year previous. This plan, however, 
failed to yield satisfactory results, for there was no 
way by which the jobber or refiner selling supplies to 
such manufacturer could determine when this 80 per 
cent, allotment had been exceeded. The matter had 
been left almost entirely to the conscience of the manu- 
facturer, and it is needless to say many were using 
quite their normal quantity of sugar. 

However as the sugar situation gradually grew 
more serious, it was decided that more positive measures 
would have to be taken to curtail the use of sugar for 
the less essential manufacturing purposes. Accord- 
ingly it was announced on May 2nd that on and after 
May 15th, sugar should not be sold for manufacturing 
purposes, either by refiners, wholesalers or retailers, 
except upon the presentation and cancellation of 
certificates for the quantity of sugar sold, which 
certificates were to be issued by the Federal Food Ad- 
ministrator of the State into which the sugar was to 
be shipped. Exception was made for bakers, and for 
druggists using sugar in the preparation of medicines. 
Statements were demanded from each manufacturer, 
and the amount of certificates issued to him was based 

115 



116 DISTRIBUTION OF FOODS 

upon the amount of sugar used during the correspond- 
ing period the previous year. So-called essential manu- 
facturers were given their normal requirements while 
the non-essential manufacturers were allowed only 80 
per cent, of the amount they had used the previous 
year. In issuing certificates for this period the entire 
amount of sugar used since the first of January was 
taken into consideration, and if the manufacturer had 
already used up his 80 per cent, allotment, he was 
entitled to receive no more sugar until July first. 

As the scheme of sugar rationing put into effect on 
the latter date was so much more comprehensive than 
the one of May 15th, we shall consider the entire plan 
in the light of the regulations as effective July first. 

By this time the sugar shortage had become most 
acute. The sugar crops in the countries from which 
we secure our principal supplies had proved smaller 
than anticipated. The German drive in France had 
resulted in the total destruction of some of the most 
important beet sugar producing factories in that 
country. Large quantities of sugar had been lost 
through submarine sinkings, and more than all else 
the acute shortage of ocean tonnage and the imperative 
need of the diversion of a large number of ships to 
carrying our troops to France, had rendered it im- 
possible to bring into this country the supplies of raw 
sugar which we had hoped. We were approaching the 
season of the heavy consumption of sugar for canning 
purposes, and the Food Administration feared that 
there would be immense losses of perishable foods unless 
sufficient sugar could be obtained for canning purposes. 

It became necessary, therefore, not only to limit the 
amount of sugar to be used for the less-essential manu- 
facturing purposes, but also to exercise some control 
over the homes and public eating places, and either to 



THE SUGAR CERTIFICATE PLAN 117 

induce or force the necessary amount of conservation. 
The Food Administration was not willing to take any 
chances on the amount of sugar to be conserved, and 
after a survey of the total existing and probable sup- 
plies, it was decided just how much sugar could be 
spared each month. By means of the prohibition of 
the sale of any sugar by refiners to wholesalers, with- 
out the presentation of sugar certificates issued upon 
the authority of the Food Administration, a method 
was found of arbitrarily checking the consumption of 
sugar to the amount which it was felt would be within 
the safety limits. 

The Federal Food Administrators of the various 
states were instructed to issue certificates to all classes 
of manufacturers using sugar in their products, to 
public eating places, to retail dealers and to bakers, 
and in fact to everybody that was entitled to buy sugar 
for any purpose, other than for immediate household 
consumption. No one other than the consumer was 
permitted to buy sugar after July first without the 
presentation and surrender of certificates therefor. It 
was not believed necessary to issue certificates to con- 
sumers. As all the sugar used by the consumers had 
to pass through the hands of the retailer, the total 
amount of sugar to be used in the household could be 
controlled by the amount of certificates to be issued to 
the retail stores. Furthermore there was neither the 
time nor sufficient funds to make possible the installa- 
tion of a system of consumers' cards, and the Food 
Administration in this, as well as in all other matters 
of food control, wanted to make voluntary self-denial 
the principal basis for conservation. 

In order to provide wholesale dealers with a sufficient 
stock to enable them to operate, they were issued 
interim certificates for sugar, sufficient to bring their 



118 DISTRIBUTION OF FOODS 

total stock of sugar up to thirty days' normal require- 
ments. These interim certificates with the stock on 
hand constituted the wholesaler's working capital. 
The wholesale dealer was not permitted to purchase 
sugar without certificates. In addition to his interim 
certificates he was allowed to use the certificates ob- 
tained from his customers as a basis for the purchase 
of additional sugar from the refiners. These cer- 
tificates when collected by the refiner were canceled and 
turned over to the State Food Administrator who had 
issued them. If any wholesaler violated the regula- 
tions and sold sugar without certificates, such a sale 
represented a permanent reduction in his stock, as he 
was unable to replace such sugar in his purchases from 
refiners. 

The total amount of sugar certificates which the 
Federal Food Administrators were authorized to issue 
to retailers in each state was based on the voluntary 
ration of three pounds per person per month. In addi- 
tion to this amount retailers were permitted to sell 
sugar to bakers and manufacturers, and the certificates 
surrendered by such persons could be used by the 
retailer in replenishing his stock from wholesalers. The 
retailer was also permitted to sell sugar in twenty-five 
pound lots for home canning, upon the surrender by the 
purchaser of home canning agreements in the form 
prescribed by the Federal Food Administrator of his 
state. These home canning agreements could in turn 
be accepted by the jobber, and were used by him in 
the purchase of sugar from refiners. 

The scheme was admirably suited for tfie control 
of the total amount of sugar to be consumed in the 
country, as the certificate plan placed this matter en- 
tirely within the control of the Food Administration. 
The principal problem was to secure an equitable 



THE SUGAR CERTIFICATE PLAN 119 

distribution of the available supplies between the 
different classes of trade and among consumers. 

The following is the scheme upon which sugar 
certificates were apportioned for July, August and 
September, 1918: 

Class A. Included manufacturers of the following: 
Candies, syrups, chewing gum, cocoa and chocolate, 
condiments, confections, flavoring extracts, invert 
sugar, soda water, soft drinks, sweet pickles, tobacco, 
honey, wines, dental preparations* dessert powders, 
malted milk, etc. (Manufacturers in this class were 
limited for July, August, and September to 50 per cent, 
of the amount of sugar they used for the correspond- 
ing months the preceding year.) 

Class B. Included manufacturers of canned and pre- 
served fruits and vegetables, catsup, chili sauce, drugs, 
explosives, glycerine, preserved meats and milk, and 
persons engaged in bee culture. (These were entitled 
to their reasonable requirements.) Ice cream manu- 
facturers formerly of this class were now allowed only 
75 per cent, of their consumption of sugar for the same 
period the preceding year. 

Class C. Included all public eating places, boarding 
houses serving an average of more than 25 persons 
daily, hotels, restaurants, dining cars, boats, clubs, 
buffets, caterers, institutions (city, country, state or 
federal), hospitals, private canteens, internment camps, 
etc. (Basis of allowance was 3 pounds for every 90 
meals served during same quarter 1917, or 3 pounds 
per month for every 90 meals served in June, 1918.) 

Class D. Included manufacturers of all bakery prod- 
ucts, including bread, rolls, sweet yeast dough goods, 
crackers, biscuits, cookies, ice cream cones, cakes, pies, 
fried cakes, pastry, quick breads, Boston brown bread, 
batter cakes, waffles, etc. (The basis of their allot- 



120 DISTRIBUTION OF FOODS 

ment for the quarter beginning July first was 70 per 
cent, of the amount used during the corresponding 
period of the preceding year, or 70 per cent, of the 
sugar used in June, 1918, for each month of the 
quarter. ) 

Class E. Included retailers selling sugar to con- 
sumers. (They were allowed certificates for July 
equivalent to one-third of their total sales for the 
months of April, May, and June, 1918.) 

The issuance of sugar certificates to any person, 
firm or corporation by the Food Administration was 
not a guaranty that sugar could be obtained to 
that amount, or that the holder of the certificates was 
entitled to buy from any particular source. The or- 
dinary commercial relations of buyer and seller re- 
mained undisturbed, except that sugar could not be 
purchased without the surrender of certificates for an 
equal amount. 

Retailers could not sell sugar to consumers in quanti- 
ties greater than 2 pounds at a time for residents of 
towns or cities, or 5 pounds at a time for those residing 
in the country, except as special modifications might 
be made by the State Food Administrator for con- 
sumers located a great distance from market. In no 
case could they sell any family at a rate exceeding 
3 pounds per person per month, except for home can- 
ning, as mentioned above. If the retailer sold sugar 
for any purpose other than for family consumption and 
home canning he was required to obtain sugar certifi- 
cates from the purchaser for the amount of sugar sold. 

The apportionment of sugar to all these various 
classes was based upon sworn statements which each 
dealer or manufacturer was required to submit to the 
Food Administrator of his state, showing the past usage 
of sugar which was to be the basis of the allotment. 



THE SUGAR CERTIFICATE PLAN 121 

There is not the slightest doubt but that while the 
sugar certificate plan was perhaps as fair as could be 
devised, it resulted in inequalities and perhaps injustice 
in many individual instances. The statements sub- 
mitted by many dealers and manufacturers were practi- 
cally impossible of verification, and would have been so 
even if there had been a sufficient force of Food Admin- 
istration inspectors to examine the records of all. 
Many dealers had no records by which the facts as to 
their past use of sugar could be verified. In such cases 
reliance had to be placed in the dealer's honesty in mak- 
ing the best guess possible. As long as his statement 
was merely a guess it is possible that it was more or 
less tinged with liberality, in order that he should se- 
cure the largest possible allotment. Only in flagrant 
cases was it possible to penalize such persons for mis- 
statements. The sugar certificate plan, therefore, bore 
most heavily on larger manufacturers and dealers who 
were required to submit accurate statements of past 
performance based on their records which were usually 
in a condition to be verified. 

Furthermore, there were no sure means by which con- 
sumers could be held within the actual three pound 
limit. Many retailers do not know their customers 
personally and where there were a large number of 
clerks it was utterly impossible for the dealer to keep 
account of the total amount of sugar sold to each 
household during the month. Besides it was easy for 
a consumer to go from store to store and thus secure 
larger amounts of sugar than he was entitled to receive. 
It was evident that as the retailers' supplies were lim- 
ited, if one consumer obtained more than his proper 
share it meant a corresponding hardship to some other 
individual. 

It may be said, however, that the vast majority of 



122 DISTRIBUTION OF FOODS 

retailers made every effort to effect the most equitable 
distribution of sugar possible, and it was only through 
their voluntary cooperation, and that of consumers 
generally, that the hardships of the certificating plan 
were not greatly accentuated. Fortunately the self- 
interest of the retailer was coupled with this patriotism, 
as it was naturally his desire to keep his customers 
satisfied, and the distribution effected proved to be even 
more equitable than could have been expected. 

On the first of August, the allotment of sugar to in- 
dividual consumers was reduced to two pounds per 
month, and retail dealers were instructed to limit their 
sales to this amount. This allotment no doubt entailed 
a real sacrifice for some, but in many instances, house- 
holds voluntarily reduced their consumption below the 
amount specified. At this time also a poster was dis- 
tributed for display in all the retail stores, calling at- 
tention to the fact that the consumer's allotment of 
sugar was now two pounds per month, and showing by 
graphic illustration that this allotment was still con- 
siderably larger than that of the civilian population 
of the Allies. 

As all hotels and public eating places were under the 
certificate plan, it was not difficult to limit their con- 
sumption of sugar for all purposes to the amount speci- 
fied. 

One of the most serious problems encountered, how- 
ever, was the difficulty of seeing that consumers re- 
ceived the necessary amount of sugar for home canning 
in order to insure the preservation of the fruit crop. 
It was the desire of the Food Administration that suffi- 
cient sugar should be allotted for this purpose, but 
as such an allotment afforded a ready means by which 
a consumer could obtain more sugar than allowed for 
current household use, the issuance of home canning 



THE SUGAR CERTIFICATE PLAN 123 

agreements and sugar certificates for this purpose had 
to be closely guarded by the local representatives of the 
Food Administration in the respective states. No 
doubt some Food Administrators went further in re- 
stricting the sale of sugar for home canning purposes 
than it was the desire of the Food Administration at 
Washington that they should go, and there were 
numerous complaints from all parts of the country 
that large quantities of perishable fruits were liable to 
go to waste on account of the difficulty of obtaining 
sugar. 

To meet this situation the Food Administration in 
connection with the Department of Agriculture insti- 
tuted a campaign for " Maximum Canning with Mini- 
mum Sugar," and a very large number of leaflets with 
canning instructions were distributed to all parts of 
the United States. Finally the Food Administration 
determined that home canning requirements for sugar 
should be met, even at the expense of still further re- 
ducing the available supplies for the last few months 
of the crop season, and all State Food Administrators 
were instructed to freely allow the sale of sugar on 
home canning agreements, where there was satisfactory 
evidence that the purchase for home canning was in 
good faith. 

There was also some hardship on new manufacturers, 
and on dealers desiring to go into the retail or whole- 
sale business. No sugar certificates were allotted to 
manufacturers who started their plants after April 
first, or to bakers, wholesale grocers, or retailers who 
commenced business after July first. While this rule 
worked a real hardship in some instances its enforce- 
ment seemed absolutely necessary, as the curtailment of 
the sugar supplies of existing manufacturers and deal- 
ers would have been absolutely useless, if others could 



124 DISTRIBUTION OF FOODS 

immediately enter the field, and supply the demand for 
the sugar, or for the products made from it, which on 
account of the restrictions could not be supplied by the 
existing merchants and manufacturers. This rule was 
modified in November as soon as the slight easing of 
the sugar situation would permit, and State Food Ad- 
ministrators were granted authority to issue certificates 
to new dealers and bakers in cases where shifting centers 
of population presented an economic need for new chan- 
nels for food distribution. 

The sugar allotment for October was the same as it 
had been during the summer months. On the 15th of 
that month the rule for quantity sales of sugar by the 
retailer was changed so that a retailer might sell one 
pound of sugar for each member of the buyer's family 
during each half of the calendar month. This was a 
great convenience to the retail stores in assisting them 
to keep a correct account of the usage of sugar by their 
customers, and it was an economy to them in reducing 
the total number of sales. 

By the first of November the sugar situation had 
eased to the extent that it was found possible to in- 
crease the consumers' allotment of sugar to three 
pounds per month, and the retailer was allowed to sell 
a full thirty days' supply to each family. There was 
also a more liberal allowance of sugar to certain manu- 
facturers, and the allotment to all public eating places 
was increased in proportion to the increase of the con- 
sumers' allotment. 

Soon after the signing of the Armistice it was found 
possible to withdraw the sugar rationing plan entirely, 
and no further restrictions remained on the quantity 
sale of sugar after December first, except that under the 
general license regulations, stocks were limited to sixty 
days' supply, while in the North Atlantic States it was 



THE SUGAR CERTIFICATE PLAN 125 

necessary to prohibit the carrying of more than a thirty 
days' supply till the arrival of the new Cuban crop. 
The restriction on the quantity sales of sugar by the 
jobber to the retailer was automatically canceled when 
the certificate plan went into effect, and there was no 
necessity of its revival after the plan was withdrawn, 
as it was believed that the sixty-day rule would be all 
that would be necessary to prevent hoarding. 

The relative amount of sugar saving which was ef- 
fected through the sugar certificate plan, compared 
with the amount saved through the voluntary sacrifice 
of the American people, is of course problematical, as 
both elements worked to the same end. However, as 
there was always a demand for all the sugar permitted 
to be sold under the certificating plan, it is evident 
that in the last analysis, the total saving of sugar was 
contingent on the amount of certificates issued. The 
voluntary saving, however, was absolutely essential to 
the success of the plan as a whole, for on account 
of the inevitable inequalities of distribution, without this 
voluntary saving, such a hardship would have been 
worked on so many individuals that public opinion 
would hardly have supported the maintenance of the 
certificate plan. It is safe to say that during the en- 
tire period of the operation of this system the Ameri- 
can people consumed less than 70 per cent, of their 
normal quantity of sugar, and probably 900,000 tons 
of sugar were saved. The results fully justified again 
the faith of the Food Administration in the develop- 
ment of the spirit of sacrifice of the people as the only 
true basis upon which a democracy could win a war. 



CHAPTER XV 

DEVELOPMENT OF SPECIAL COMMODITY REGULATIONS 

We have now discussed the general principles upon 
which the Food Administration regulations were 
founded. However, in the application of these general 
principles to the various commodities, such a wide di- 
vergence of conditions was found to exist that there 
was a gradual tendency toward the specialization of 
all rules and regulations. Accordingly several divi- 
sions of the Food Administration were organized and 
the specific task assigned to each of working out the 
problems and establishing special rules applicable to 
manufacturers and dealers in some one or more of the 
important food commodities. A great many of these 
divisions first saw their rise and development in the 
Distribution Division or in the Perishable Goods Divi- 
sion, and the rules as ultimately formulated partook 
of the general character of the rules of either one or 
the other of the parent divisions. 

The general license regulations applied to all com- 
modities until the special rules governing a particular 
commodity were promulgated, after which time both the 
general and the special rules applied, except where the 
special rules conflicted with the general rules, in which 
latter case the special rules applied. 

It is not possible within the brief compass of this 

work to call attention to the methods by which it was 

sought to adapt the general principles of the license 

regulations to the various commodities. In all the 

126 



SPECIAL COMMODITY REGULATIONS 127 

special license regulations a scheme of control was 
worked out with the sole purpose of accomplishing the 
objects already set forth as the principles underlying 
all Food Administration rules and regulations. 

The efforts of the Food Administration to maintain 
a fair and reasonable price to the consumer extended 
in some cases beyond the control of manufacturers' and 
distributors 5 profits. In the case of all commodities 
where it was possible to do so, the producers were called 
together, and partly by means of regulations applicable 
to licensees, and partly by means of voluntary agree- 
ments, agreed prices for the raw material were estab- 
lished, by which not only was the producer assured of 
a fair and reasonable price for farm products, but 
through the establishment of manufacturers' and dis- 
tributors' margins, the stabilization of prices for the 
commodity to the consumer for the entire season was 
obtained. Among the articles upon which basic maxi- 
mum prices were established we find : wheat, flour, sugar, 
lard substitutes, rice, canned salmon, canned sardines, 
canned tuna fish, California dried fruits, black strap 
molasses, refiners syrups, mill feeds, cottonseed prod- 
ucts, and a few others. 

Where it was not possible to establish basic prices, 
competition among dealers and manufacturers was al- 
lowed to control the price which the grower received 
for the raw material, and the efforts of the Food Ad- 
ministration were largely confined to seeing that no 
manufacturer or intermediate distributor made more 
than a reasonable profit. The latter class of commodi- 
ties embraced the following important staples : corn, 
oats, rye, barley and their products ; live stock and its 
principal derivatives : canned peas, corn and tomatoes, 
coffee, condensed milk, butter, cheese, eggs, poultry, etc. 
Upon these latter commodities no means were found 



128 DISTRIBUTION OF FOODS 

under the law of effectively controlling the price of raw 
material without discouraging production, which would 
have been fatal to the whole scheme of food control. 

We shall briefly mention the means by which it was 
sought to control a few of the more important items 
among the commodities mentioned above. 

FLOUR 

As already pointed out the basic price„ of flour was 
obtained from the cost of wheat as fixed by Presidential 
proclamation. On the crop of 1917, flour millers were 
allowed a net profit of 25 cents per barrel. As the 
cost of milling varied in different mills, it was impos- 
sible to secure in this way a perfect stabilization in flour 
prices. Many of the mills desired to play safe and 
charged enough for their flour, so that there would be 
no chance of their total profits for the year falling 
below the amount allowed. As a result some of the 
larger mills toward the close of the season, found it 
necessary to reduce their flour prices far below the 
cost of production, and a few favored dealers were 
thus enabled to obtain flour at three or four dollars 
per barrel less than the prevailing market price. The 
Food Administration undertook to trace sales of flour 
at these exceptionally low figures to see that the con- 
sumer got the benefit of these prices. This method, 
however, proved so unsatisfactory that the Food Ad- 
ministration advised the mills that if they had any more 
flour to sell at below cost prices, they should sell it to 
the Government. 

Another serious objection to this method of regulat- 
ing flour prices was that it offered great temptations 
to the miller to pad his expense accounts, to increase 
salaries of officials, and to charge expense of operation 
improvements which should have been charged to capital 



SPECIAL COMMODITY REGULATIONS 129 

account, and a number of millers who were unable to re- 
sist the opportunity of extra profits which such methods 
afforded lost their licenses. 

Under the new basis for the 1918 crop, the miller 
was allowed a gross profit of $1.10 per barrel to cover 
his entire expenses of operation and manufacturing 
costs. The basic price was arrived at as follows : The 
price of wheat mill door was multiplied by 4.4 to give 
the value of the wheat content of a barrel of flour. 
From this amount was deducted the value of 68 pounds 
of mill feed which was taken out of the wheat in the 
course of manufacture. To the price so obtained was 
added a maximum of $1.10 which represented the 
miller's gross profit. This was the basic price or maxi- 
mum which he might charge for the sale of flour in car 
lots f. o. b. mill. A differential of 25 cents per barrel 
was allowed for sales of flour to wholesale dealers in 
carload lots payment on arrival, and of 35 cents per 
barrel for flour sold in less than carload lots, payment 
on arrival. In sales to retailers mills might charge 
50 cents per barrel additional over basis as a distribu- 
tor's profit. 

An additional charge for credit and delivery service 
was allowed on sales to dealers which, however, could 
not exceed the actual cost of the service performed, 
and in no event could it exceed twenty-five cents per 
barrel. In sales to consumers the mills were permitted 
to add a distributive charge of not to exceed $1.20 
per barrel. In addition to this margin the miller was 
permitted to add the actual cost of the containers used, 
and all freight charges where goods were sold delivered. 

As the margins for wholesalers and retailers were 
also fixed the price of flour was thus stabilized through- 
out the United States. The large amount of wheat and 
flour pressing on the market early in the fall of 1918, 



130 DISTRIBUTION OF FOODS 

however, resulted in a competitive condition so that in 
many localities flour was sold on a margin considerably 
less than the maximum which mills and dealers were per- 
mitted to take. 

MILL FEEDS 

Throughout the history of the Food Administration 
the demand for mill feeds far exceeded the supply. It 
was at once evident that the millers' profits must be con- 
trolled on feeds as well as on flour, so that a basic price 
was fixed for mill feeds almost as soon as the original 
flour regulations were adopted. This basic price 
brought the feeds into direct relation to the price of 
wheat, and as the wheat price had been stabilized, the 
stabilization of the price of mill feeds naturally fol- 
lowed. However, as conditions changed it was fre- 
quently necessary to change the basis of the price of 
the different feeds among themselves, as well as the 
basic price of feeds in its relation to wheat. As finally 
effective for the 1918 crop the basic price of mixed mill 
feeds, containing all the wheat kernel not made into 
flour, f. o. b. mill, was fixed at one-third the cost of 
an equal weight of wheat. Shorts, middlings and red 
dog might be sold at $.75 per ton over the basis so 
established, and bran could be sold at not more than 
$1.25 per ton under this basis. 

The following additional margins were permitted: 
sales of mill feeds of less than one carload but more 
than one ton, to wholesalers $1.00 per ton, to retailers 
$2.00 per ton; sales of less than one ton lots to any 
dealer $3.00 per ton. The margin of millers on sales 
to consumers was based on the action of the zone agents 
of the Food Administration, and mills in each zone 
were instructed as to the maximum which would be al- 



SPECIAL COMMODITY REGULATIONS 131 

lowed in their particular locality. In addition to the 
specific margins the mill might add the actual interest 
on credit accounts and the actual cost of cartage when 
goods were sold delivered. 

Through similar methods the basic price was fixed for 
all feeds which were the products of rice, cottonseed, or 
beets. The dealer's profit on all these feeds was fixed 
as follows: 

Shipment from mill, cash or sight draft, carload lots, 1.00 per ton 
Shipment from mill, payment on delivery, carloads, $1.50 per ton 
Shipment from mill, over one ton but less than one 

carload $2.00 per ton 

Shipment from mill, less than one ton, $2.50 per ton 

Delivery out of dealer's warehouse, quantities of one 

ton or more $4.00 per ton 

Sales out of dealer's warehouse, less than one ton, $5.00 per ton 

To these margins might be added not to exceed $1.00 
per ton for credit and delivery. The retail dealer was 
further not permitted to make an average of more than 
6 per cent, net on his annual sales of feeds, while the 
wholesaler was limited to an average profit not to ex- 
ceed 4* per cent, on his gross annual sales. 

As the price of coarse grains was not stabilized, and 
as these commodities were subject to rapid fluctuations 
of the market, it was not possible to establish specific 
margins for dealers in feeds which were the products 
of the coarse grains. However, both manufacturer and 
retail dealer were limited to a specific average net re- 
turn of 6 per cent, on their total annual sales of feeds, 
and the wholesale dealer was limited to a net return 
not to exceed 4 per cent, on his gross sales of feeds. 
No individual transaction could show either wholesaler 
or retailer a gross profit in excess of 15 per cent. 

Likewise the profit for dealers in the coarse grains 
themselves was limited to a maximum of 3 per cent, net 



132 DISTRIBUTION OF FOODS 

on gross sales of not more than $300,000 per annum, 
and of 2! per cent, net on gross sales in excess of $300,- 
000 per annum. 

SUGAR 

In a preceding chapter we have described the various 
steps by which the basic price of sugar was fixed. It 
was not found possible, however, to renew for the 1918 
crop, the agreements with the sugar beet producers 
and the cane sugar interests on the same basis as the 
preceding year. After prolonged negotiations with the 
sugar beet producers and with the beet sugar refiners, 
a basis was agreed upon for the purchase of beet pulp, 
and refiners' margins were fixed on the basis of the cost 
of the raw material which necessitated an advance in 
the price of refined sugar from $7.35 to $9.00 per 100 
pounds sea-board basis. This advance became effective 
on September 9th, 1918, and applied to all lots of sugar 
received from the refiners after that date, regardless 
of the price at which sugar in transit might have been 
billed. 

All stocks of sugar in the hands of refiners were taken 
over by the Sugar Equalization Board, a Government 
corporation, at the old price and rebilled to them at 
the new price, so that refiners were not permitted to 
absorb any additional profits out of the advance. The 
profit thus earned by the Government was used to de- 
fray the expenses of the administration of the sugar 
distributing plan, and the surplus) reserved for the 
equalization of the price of the raw product where the 
agreed price was found to work inequitably. Whole- 
salers and retailers were permitted to sell sugar pur- 
chased on the old basis at the new level of prices es- 
tablished, but they were required to sell all their exist- 
ing stocks at not more than the prescribed margin 



SPECIAL COMMODITY REGULATIONS 133 

over cost. This latter action alone probably resulted 
in a net saving to the consumer of not less than $15,- 
000,000, as there is no question but that for the regu- 
lations dealers would have immediately advanced their 
prices to conform to the new basis. 

CANNED FOODS 

As already pointed out, it was found impossible to 
establish a basic price for canned peas, corn or toma- 
toes. The prices at which canned goods of the 1918 
pack were sold for future delivery were by far the high- 
est ever known for future sales. There were no means 
by which the Food Administration could prohibit the 
sale of futures at the prices named without doing great 
harm to the industry. If trading in futures had been 
suspended entirely, many small canners would have been 
unable to finance their operations for the year. 
Furthermore it was impossible to limit these prices 
through the curtailment of profits, for the products 
were yet to be grown, and future costs in the existing 
condition of the market for labor and material were 
entirely problematical. 

It was decided, therefore, that definite maximum 
margins for canners should be established, and if after 
the crop had been produced, and the goods packed, 
it was found that the canner would make more than the 
prescribed margin on the sale of the goods at the con- 
tract price, he should be required to reduce his price 
at the time of billing so as to conform to the margins 
set. 

It is believed that the margins established were suffi- 
ciently liberal as compared with the average profits 
of the canners for the previous years, and it was felt 
that as long as the Food Administration was not in a 
position to guarantee the canner against losses, the 



134 DISTRIBUTION OF FOODS 

permissible profit should be a little higher than the 
average, for otherwise production might be discouraged. 
On May first, 1918, the following maximum margins 
were announced for canners. 

Corn No. 2. Standard $ .19 per dozen 

Corn No. 2. Extra Standard .$ .22 per dozen 

Corn No. 2. Fancy $ .30 per dozen 

Peas No. 2. Sub Standard $ .15 per dozen 

Peas No. 2. Standard $ .22 per dozen 

Peas No. 2. Fancy % .31 per dozen 

Tomatoes No. 3. Standard $ .21 per dozen 

Tomatoes No. 3. Fancy .$ .31 per dozen 

Tomatoes No. 10. Standard $ .90 per dozen 

Tomatoes No. 10. Fancy $1.00 per dozen 

While the Government purchases were larger than 
anticipated, the season proved quite favorable to the 
production of canned foods, and notwithstanding the 
high prices prevailing for labor and materials, many 
canners found that they could not deliver their products 
on the basis of the contract prices without making a 
profit materially higher than that allowed by the regu- 
lations. Every effort was made to get such canners to 
revise their prices before billing, as it was feared that 
after the goods had been shipped they would move 
quickly to the retailer and thus pass into consumption, 
and if the price revision was made after the goods had 
been shipped, it would be impracticable to rebate the 
goods all along the line so that the consumer would 
get the benefit of the reduction. In that case the re- 
bate would accrue as an unearned profit to the dealer. 

Accordingly, it was announced on September 14th, 
that the revision of prices by canners must be made be- 
fore shipping the goods. But many canners found that 
they could not do this. In many cases the packing sea- 
son had not been completed, but the canner was com- 
pelled to make shipment as buyers were demanding 



SPECIAL COMMODITY REGULATIONS 135 

goods for the early fall trade, nad in many cases the 
canner was compelled to make shipment because of 
lack of storage space. 

The net result was that when the packing season was 
complete, and canners were closing their books, a very 
large number found that they had exceeded the maxi- 
mum profits allowed by the Food Administration. 
Many of the goods so sold had already reached the 
consumer, and there was no means by which the neces- 
sary reduction in price could be made to apply to the 
particular goods sold. 

In view of this condition the Food Administration is- 
sued a circular on October 25th, permitting a canner 
who had made excessive profits to remit the amount in 
excess of the authorized margin to the jobber to whom 
he had sold the goods, and at the same time he was 
required to report the transaction to the Food Admin- 
istratis. The jobber who received such rebate was 
required to apply it on the cost of the goods, if same 
were still held in stock, or otherwise upon the cost of 
all goods in stock of the same size and grade of the 
same commodity, and to sell such goods on the basis 
of the cost so reduced. In this way if the consumer 
did not get the benefit of the rebate on the particular 
can of goods for which it was intended, he did get a 
similar reduction on other goods of like kind, so that 
the net result to the consumer was the same as if the 
price had been reduced before billing by the canner. 

The jobber was also required to report the details 
of each transaction to the Food Administration, and 
the reports of the canner and of the jobber were com- 
pared to see that the regulations had been complied 
with. It is estimated that $12,000,000 to $15,000,000 
in real cash was thus actually rebated to dealers by 
canners, and the effect of this on the market was such 



136 DISTRIBUTION OF FOODS 

as to reduce the total cost of canned goods to the con- 
sumer by probably much more than the amount of the 
rebates. 

The Food Administration found it possible to enter 
into definite agreements with salmon packers and with 
packers of sardines and tuna fish by which specific 
maximum prices were agreed upon for the 1918 pack, 
and in many cases also through these agreements the 
fisherman was assured of a definite minimum price for 
raw fish, which it was believed would serve to stimulate 
production. While the prices so agreed upon and pro- 
mulgated by the Food Administration seemed high they 
were materially lower than those first asked by the 
packers or than those which would have prevailed but 
for the establishment of the margins. In all cases a 
careful investigation was made of the expenses of the 
business, and, with a further limitation upon the annual 
net returns to the packers, the public was assured of 
the most reasonable prices possible under the circum- 
stances. The following tables indicate some of the 
maximum prices so promulgated. 

Salmon Maximum Prices F. O. B. Coast 

No. 1 Tall No. 2 Fiat Halves 

Alaska Reds $2.35 $2.50 $1.65 per doz. 

Alaska Medium Reds . . $2.25 $2.40 $1.60 per doz. 

Alaska Pinks $1.65 $1.80 $1.15 per doz. 

Alaska Chums $1.60 $1.75 $1.10 per doz. 

Puget Sound and Washington Coast Salmon. 

No. 1 No. 1 ul 

Tall Flat Waives 

Fancy Spring or Chinooks $3.15 $3.25 $2.00 per doz. 

Standard Spring or Chinooks $2.75 $2.85 $1.75 per doz. 

Cohoes $2.40 $2.50 $1.60 per doz. 

Chums $1.75 $1.85 $1.10 per doz. 

The maximum price for eastern sardines %s oil 
was fixed at $6.50 per case, and packers agreed to 



SPECIAL COMMODITY REGULATIONS 137 

pay $25.00 per hogshead for raw fish. Similar ar- 
rangements were made with packers of western sardines 
and with packers of canned tuna, so that both producer 
and consumer obtained the benefit of the restrictions 
so imposed. 

DRIED FRUITS 

As already pointed out no sales of licensed dried 

fruit for future delivery were allowed before July first 

of the year in which the commodities sold were to be 

packed. Packers of dried apples were limited to a net 

return of 4? per cent, on their total annual sales. After 

prolonged conferences between the Food Administration 

and the California packers the following maximum 

prices were agreed upon for dried fruit of the 1918 

pack, price f . o. b. Pacific Coast : 

Peaches, Choice Yellow $ -11% per pound 

Peaches, Fancy Yellow $ .12% per pound 

Peaches, Choice Muir $ «H% per pound 

Peaches, Fancy Muir $ -12% P er pound 

(One cent per pound could be added for peaches packed in 
50 pound boxes and 1*4 cents per pound for peaches packed in 
25 pound boxes). 

Raisins, Fancy Seeded $ .0962 per pound 

Raisins, Choice Seeded $ .09125 per pound 

Raisins, Bulk Seeded $ .08 per pound in 25 lb. boxes 

Raisins, Loose No. 2 Crown. . .$ .075 per pound in 25 lb. boxes 
Raisins, Loose No. 3 Crown. . .$ .08 per pound in 25 lb. boxes 
Prunes, 40/50 to pound. 10 cents per pound bulk basis 
Prunes, 50/60 to pound. 9 cents per pound bulk basis 
Prunes, 60/70 to pound. 9 cents per pound bulk basis 
Prunes, 70/80 to pound. 8% cents per pound bulk basis 

GREEN COFFEE 

Coffee was an article upon which no basic price could 
be fixed as no coffee is produced in this country, and it 
was impossible to control the foreign producer. In 
December, 1917, and in January, 1918, a speculative 
movement began in coffee in this country. Although 



138 DISTRIBUTION OF FOODS 

stocks were at the time sufficiently large, both in 
America and in Brazil, there was a great deal of anxiety 
over the tonnage situation, which was such as to be 
likely to cause serious curtailment of imports. 

It was therefore necessary to place green coffee under 
license, and margins were established for all dealers, 
and for a time the advancing tendency of the market 
was completely checked by the fixing of maximum prices 
for the sale of futures on the New York Coffee Ex- 
change. 

In June, however, there occurred one of the most 
disastrous frosts in the history of Brazil. Damage to 
the coffee trees was estimated at from 40-80 per cent. 
The Brazilian market became excited and a most rapid 
and unprecedented advance took place. Immediately 
after the signing of the Armistice, the advance was 
accentuated by the belief that the Central Powers 
would take vast quantities of coffee, and the price was 
run up 21% cents per pound for Santos 4's in Brazil, 
as compared with a price of 8 cents in May. 

As it was impossible for the Food Administration to 
stop this advance or in any way to control it, the ac- 
tivity of the Food Administration was directed towards 
seeing that no profiteering took place on existing stocks, 
and it was ruled that all coffee must be sold on the basis 
of average cost, rather than on the basis of the existing 
market. The result of this control was that roasted 
coffee could be purchased at retail throughout the 
United States at very little more, shrinkage considered, 
than the price of the raw product in Brazil. 

Maximum margins as finally established on green 
coffee were as follows: 

Importer's margin 5 per cent. 

Jobber's margin 7% per cent. 

Jobber's margin (less than 25 bag lots) 12% P er cent. 



SPECIAL COMMODITY REGULATIONS 139 

On resales within the same class of trade only half the 
permissible profit was allowed, and only one resale was 
permitted. 

On purchases for importation after December 15th, 
1918, the importer was allowed a maximum profit of 
71/2 P er cent,, and he was permitted to average this 
profit on all sales for a period of three months. This 
change was necessary as the risk attached to the im- 
portation of coffee was such that importers did not care 
to make purchases under existing conditions, and some 
means had to be devised to offer greater inducements 
for importation. 

Roasted coffee was not licensed, but the Food Ad- 
ministration ruled that it would construe any profit 
exacted by the roaster in excess of his customary pre- 
war net percentage as prima facie a violation of the 
statute. 

Another important matter in connection with coffee 
was the freight situation. The United States Shipping 
Board had fixed maximum freight rates from Brazil, 
but steamer space was so scarce that when once secured 
it was frequently resold to another importer at an 
exorbitant profit. This practice was checked by a rule 
which prohibited any licensee importing coffee from 
paying any freight rate in excess of that prescribed by 
the Shipping Board, and many of these freight profit- 
eers were compelled to make refunds. 

CHEESE 

Rules governing manufacturers and dealers in Ameri- 
can Style or Cheddar Cheese were announced on June 
12th. These rules were subsequently amended to cover 
other types of cheese, and the wholesale dealers' mar- 
gins as finally announced after some changes were as 
follows : 



140 DISTRIBUTION OF FOODS 

American Style or Cheddar Cheese 

quantity 

Carload lots % cent per pound 

7000 pounds to carload 1% cents per pound 

4000 to 7000 pounds 1% cents per pound 

1000 to 4000 pounds 2% cents per pound 

100 to 1000 pounds 3 cents per pound 

Under 100 pounds 3% cents per pound 

Retailer to consumer .7 and 8 cents per pound 

Round Tub or Swiss Cheese 

Carload lots 1% cents per pound 

6000 pounds to carload 2% cents per pound 

3000 to 6000 pounds 3% cents per pound 

On Tub to 3000 pounds 4 cents per pound 

120 pounds to one tub 5 cents per pound 

Under 120 pounds 8 cents per pound 

Block Swiss Cheese 

Carload lots 1 cent per pound 

8000 pounds to carload 1% cents per pound 

1500 to 8000 pounds 2 cents per pound 

750 to 1500 pounds 2% cents per pound 

150 to 750 pounds 3 cents per pound 

Under 150 pounds 4% cents per pound 

Brick, Limburger and Munster Cheese 

Carload lots iy 2 cents per pound 

6000 pounds to carload .1% cents per pound 

2400 to 6000 pounds 2% cents per pound 

600 to 2400 pounds 3 cents per pound 

120 to 600 pounds 3% cents per pound 

Under 120 pounds 5 cents per pound 

To the above margins might be added: 

a. Freight charges. 

b. Storage charges (if cheese was stored more than 60 days). 

c. Insurance charges (if cheese was stored more than 60 days). 

d. Interest on capital (if cheese was stored more than 60 days). 

e. Actual cost of paraffining (not to exceed 14 cent per pound). 

f. Cost of reboxing American type cheese (not to exceed % cent 
per pound). 

As applied to the first three types of cheese men- 
tioned, an additional charge of /4 cent per pound could 
be made for each month the cheese was stored after the 



SPECIAL COMMODITY REGULATIONS 141 

first thirty days, such additional charge, however, not 
to exceed a total of two cents per pound. 

On Brick, Limburger and Munster cheese the addi- 
tional charge for storage was % cent per pound for the 
second month and % cent per pound for each additional 
month, such additional charge not to exceed a total 
of 1% cents per pound. 

Resales of cheese within the same class of trade were 
closely restricted, and margins fixed commensurate 
with the service actually performed. In order to pre- 
vent hoarding a rule was passed prohibiting any dealer 
from carrying cheese in stock manufactured in 1917 
after June 1st, 1918, except where it was necessary 
to carry cheese for a longer time for curing purposes, 
and permits for this purpose were freely granted where 
it was clear that there was no intention to evade the 
rule. 

BUTTER 

The rules governing licensees in cold storage and 
fresh butter were similar to those applying to cheese. 
The manufacturer was limited to a profit of 5 per cent, 
over the cost of butter fat. To this margin he might 
add the actual cost of packing and containers used. 
The wholesale dealers' margins announced June 12th, 
1918, were as follows: 

Quantity. Carload lots 1 cent per pound 

7000 pounds to carload 1 y 2 cents per pound 

3500 pounds to 7000 pounds 2 cents per pound 

700 to 3500 pounds 2% cents per pound 

100 pounds to 700 pounds 3 cents per pound 

Under 100 pounds 3% cents per pound 

Retailer to consumer 6 to 7 cents per pound 

Storage, interest, insurance, and other charges simi- 
lar to those provided in the cheese rules might be added 
to these margins, as well as an additional allowance 



142 DISTRIBUTION OF FOODS 

of 1/2 cent per pound per month for each month of 
storage exceeding 60 days, but the total charge so 
added could not exceed % cents per pound. Resales 
within the same class of trade were limited as were also 
margins of brokers and commission merchants. 

EGGS 

On account of the tremendous loss of eggs through 
deterioration, breakage, etc., the rules governing licen- 
sees in eggs were principally directed to promoting 
prompt handling, fair dealing and candling. 

Maximum Margins on Cold Storage Eggs: 

Commission merchants 4% on cost 

Wholesaler to jobber 4% on cost 7% if candled 

Jobber to retailer 5% on cost 10% if candled 

Jobber to hotels and restaurants 12% on cost 

Retailer to consumer seven to eight cents per dozen 

The maximums stated above might be increased by 
6 per cent, in case the seller was also the original storer, 
and eggs were stored for a period of over thirty days, 
but if the retailer was the original storer the total 
margin allowed could not exceed 21 per cent, on cost. 

The actual loss of eggs in candling could be taken 
into consideration in figuring the retailer's costs but 
not the expense of labor of candling. 

No means were found of establishing any control 
upon the amount which the producer should receive for 
eggs, and the extraordinary high prices which prevailed 
during war times were entirely due to natural causes 
over which the Food Administration had no control. 

LARD SUBSTITUTES 

Upon the 27th of September, 1918, the Cottonseed 
Division issued a general circular announcing the rules 



SPECIAL COMMODITY REGULATIONS 143 

governing the manufacture and distribution of lard 
substitutes. In the effort to stabilize prices through- 
out the United States, both as to the price paid to the 
grower for the raw material, and the price to be paid 
by the consumer for the finished product, the price of 
crude cottonseed oil at the point of production was 
fixed at 17% cents per pound, tank cars. 

A gross manufacturer's margin of 5% cents per 
pound was allowed, so that the selling price of lard 
substitutes was fixed at 23 cents per pound tierce basis 
on all sales of 5,000 to 30,000 pounds, or M X A cents 
per pound on smaller lots. This automatically gave 
the wholesale dealer who purchased in 5,000 pound lots 
a profit of 1/4 cents per pound. Purchasers of lard 
substitutes in lots of 30,000 pounds or more were al- 
lowed by the manufacturers an additional discount of 
}4 cent per pound, so that the total differential margin 
for such dealers was 1% cents per pound. Both manu- 
facturers and dealers were asked to maintain the 
minimum differentials agreed upon, as it was felt that 
otherwise the stabilization program could not be 
successful. 

While the differentials named were regarded as the 
minimum which the dealer should accept, they were not 
intended as a maximum, for under the rules already es- 
tablished providing maximum margins for distributors, 
wholesale dealers were permitted a margin of 1/4 to 2 
cents per pound on lard substitutes in bulk, and of 8 
to 10 per cent, on selling price of lard substitutes in 
packages. 

As the basic price of lard substitutes so agreed upon 
applied only to lard substitutes packed in tierces, it 
was necessary to establish package differentials suffi- 
cient to cover the excess cost of other standard con- 
tainers used over the cost of the tierce, and with the 



14* DISTRIBUTION OF FOODS 

establishment of a few freight differentials in inter- 
mountain and Pacific Coast territory, and with the 
further establishment of retailers' margins, the price 
of lard substitutes was completely stabilized through- 
out the United States. 

OLEOMARGARINE 

As finally announced on December 4th, 1918, manu- 
facturers' profits on oleomargarine were limited to 10 
per cent, on selling price plus actual manufacturing ex- 
penses, which latter could not in any event exceed $6.50 
per 100 pounds. Wholesale dealers' margins were fixed 
at 2/4 cents per pound, and retailers' margins at 5 to 
6 cents per pound. 

FRESH FRUITS AND VEGETABLES 

On account of enormous losses which dealers were 
frequently compelled to take in handling fresh fruits 
and vegetables, the rules of the Food Administration 
did not prescribe fixed margins for handling these 
products. The regulations provided for prompt un- 
loading, and for fair dealing throughout for the pro- 
tection of both the producer and the consumer. The 
shipper was not permitted knowingly to ship goods be- 
low quality called for in the contract, and the con- 
signee was required to unload goods within three days 
of arrival, and he was not permitted to cancel an order 
while goods were in transit or after arrival, and rejec- 
tions were not allowed except for justifiable causes. 
Commission merchants were forbidden to advance their 
commissions, and negligence on the part of any dealer 
resulting in the waste or deterioration of wholesome 
food was severely punished, and in quite a number of 
cases resulted in the loss of the dealer's license. 



SPECIAL COMMODITY REGULATIONS 145 



SYRUPS AND MOLASSES 

Syrup prices were stabilized by agreements with re- 
finers fixing the price of the raw material. The follow- 
ing were the basic prices announced; f . o. b. point of 
production : 

In Barrels. In Tank Cars 
Refiners Syrup, High grade per gal. . .$ .55 $ .50 

Refiners Syrup, Medium grade per gal..$ .40 $ .35 

Refiners Syrup, Low grade per gal $ .30 $ .25 

Black Strap Molasses per gal $ .23 $ .17 

Beet Molasses— Bulk per gal $ .23 $ ,17 

MAXIMUM MARGINS ON SYRUPS 

Syrup Mixers 6% net, on gross sales. 
Syrup Dealers 5% gross on car lot sales. 
Syrup Dealers 7% gross less than car lots to jobbers. 
Syrup Dealers 12-15% gross less than car lots to bakers, retailers, 
etc. 

Standards were set for the manufacture of the 
various classes of syrups, but these were repealed soon 
after the signing of the Armistice. 

RICE 

On July 29, 1918, the Food Administration an- 
nounced its rice regulations, and the terms of the agree- 
ment with the rice millers. 

The margin for the dealer in rough rice was fixed 
at 1 per cent, on straight sales, and not to exceed 1% 
per cent, additional for special services. No resales 
on rough rice were permitted but the dealer was re- 
quired to sell directly to the mill. The miller's margin 
was fixed by agreement providing a minimum price to 
growers and a maximum price to the trade for clean 
rice, which allowed millers approximately a gross profit 
of Y2 cent per pound. The basis agreed on for the 
1918 crop was 7% cents per pound for Fancy Blue 



146 DISTRIBUTION OF FOODS 

Rose, f . o. b. mill, with other grades at corresponding 
differentials. Commissions of brokers and margins of 
all intermediate dealers were also fixed, so that, freight 
considered, the retail price of rice was practically uni- 
form throughout the United States. 

Rice flour was not permitted to be manufactured 
from whole rice, and the miller's margin on rice flour 
was fixed at 75 cents per 100 pounds over the cost of 
screenings. 

CEREALS, CORNMEAI*, OATMEAL, ETC, 

As it was impossible to adopt any price stabilization 
plan with reference to the coarse grains, it was like- 
wise impossible to fix any basic price for products man- 
ufactured from coarse grains. There is no doubt that 
some millers made excessive profits early in the season 
of 1918, as these products were in such heavy demand 
owing to the operation of the " Fifty-fifty " rule. 
As soon as possible, however, a schedule of manufac- 
turer's maximum profits was worked out on the basis of 
the cost of the raw material as follows : 

manufacturers' margins cereal products 

Old Fashioned Corn Meal 50 cents per 100 pounds over cost of corn 

Bolted Corn Meal 50 cents per 100 pounds over cost of corn 

Pearl Hominy 80 cents per 100 pounds over cost of corn 

Grits 80 cents per 100 pounds over cost of corn 

Cream Meal 80 cents per 100 pounds over cost of corn 

Raw Corn Flakes 1.20 per 100 pounds over cost of corn 

Other Corn Meal 60 cents per 100 pounds over cost of corn 

Barley Flour 95 cents per 100 pounds over cost of Barley 

Rolled Oats, Oat Flour 90 cents per 100 pounds over cost of Oats 
Rye Flour 90 cents per 100 pounds over cost of Rye 

In addition the manufacturer was not permitted to 
make a net profit to exceed 6 per cent, net on his gross 
sales figured semi-annually. 

Standards of manufacturing extraction and moisture 



SPECIAL COMMODITY REGULATIONS 147 

content were promulgated for all the above products, 
which greatly improved their keeping qualities. 

Uniform size containers were prescribed, and package 
differentials were established to cover the varying cost 
of the containers used. 

LIVE STOCK FRESH MEAT, ETC. 

Many causes contributed to render it impossible to 
standardize prices for live stock and its derivatives. 
The almost infinite number of by-products, and the 
great variety of grades of live stock, together with an 
extremely wide difference in manufacturing costs, ren- 
dered it impossible to determine upon a specific manu- 
facturer's margin for the sale of each product. How- 
ever, as the large part of the meat packing industry was 
concentrated in a few hands, it was not found difficult 
to exercise a close supervisison over the entire industry, 
to see that no excessive profits were exacted. The 
books of all packers were examined, and they were not 
permitted to earn more than 9 per cent, of their actual 
capital invested, and not to exceed 2% per cent, on 
their gross sales. 

Wholesaler's and retailer's margins were established 
on standard hams and bacon, and some progress was 
made by the Retail Section in standardizing cuts of 
fresh meat and in the establishment of tentative retail 
margins on the sale of this product. These problems 
were worked out in considerable detail in Washington, 
D. C, and in Philadelphia. The standardization of 
cuts made possible the exhibition in each retail meat 
store of a blackboard showing the prices of each of 
the various kinds of meats. The success of these 
experiments was such as would have fully justified the 
extension of the operation of this plan over the rest 
of the country if the war had continued. 



CHAPTER XVI 

VOLUNTARY PROPAGANDA 

The summer and fall of 1918 saw many efforts of the 
Food Administration not only to retain the loyal coop- 
eration of the trades which had already been secured, 
but also to capitalize and use this good will in impor- 
tant service in connection with the winning of the war. 

The approach of the potato harvest of 1918, found 
producers and dealers stocked with immense quantities 
of potatoes that had been left over from the previous 
year. This surplus was partly due to the fault of the 
growers in asking too high a price for the potatoes at 
first, and partly to the failure of transportation in the 
early winter, which had held potatoes back on the farm. 
Potatoes could not be exported, and as there was such 
an acute shortage of wheat a most energetic campaign 
was conducted through the wholesale and retail dealers 
to push the sale of potatoes, and to urge their use by 
the consumer in the place of wheat. Without doubt 
this campaign resulted in the avoidance of the com- 
plete loss of millions of bushels of this important food 
commodity, with a corresponding saving in wheat for 
export. 

CERTIFICATE OF PLEDGE CAMPAIGN 

It was also necessary to keep alive the retailers' spirit 

of voluntary cooperation. Sometimes the rapid 

changes in the regulations were discouraging to the 

dealer, and there was danger of the growth of apathy. 

148 



VOLUNTARY PROPAGANDA 149 

A new pledge campaign was instituted with the aid of 
the wholesale grocers and their salesmen, whereby all 
retailers were requested to renew their written pledge 
of loyalty to the Food Administration, and to agree to 
abide by all the rules and regulations, as well as to 
carry out fully, as far as possible, the Food Adminis- 
tration program of conservation. As these pledges 
were signed by the retailer, they were mailed to the 
Food Administration by the salesman who obtained 
them, and each dealer who had signed the pledge was 
sent a certificate of enrollment in the Food Adminis- 
tration which he was asked to display prominently in 
his front window. Again the ready cooperation of the 
jobbing trade and of the traveling salesmen brought 
quick and satisfactory returns to this effort, and it was 
not long till the certificates were displayed quite gen- 
erally throughout the United States. 

SAVING OF FRUIT PITS AND SHELLS 

The Conservation Section of the Distribution Division 
also requested and obtained the cooperation of the deal- 
ers in the saving of fruit pits and nut shells for the 
manufacture of carbon for gas masks for our soldiers 
in France. It was found that this material made better 
carbon than any other available thing, except cocoanut 
shells, and as these articles were not available in any 
material quantity it was necessary to institute a cam- 
paign among consumers for saving and collecting them. 

Wholesale and retail dealers carried out the instruc- 
tions of the Food Administration with special eagerness 
on this point. They seemed more than glad to con- 
tribute any service of a kind which would directly aid 
in the saving of the lives of our boys in France. Pos- 
ters urging the saving of the articles were printed by 
many wholesale dealers and were exhibited in retail 



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152 DISTRIBUTION OF FOODS 

stores everywhere, and each retailer displaying the 
poster provided a receptacle for the deposit of these 
much needed articles. After being assembled in this 
way, the pits and shells were turned over to the Red 
Cross, and were further assembled and shipped to the 
Gas Defense Division of the United States Army. In 
an almost incredibly short time more than 100 carloads 
were on the way. Owing to the Armistice, however, but 
little of the carbon thus manufactured was actually 
used in France, but ample supplies of this valuable 
material were assured if the war had continued. 

brokers 

It would not be fitting to close the history of this 
Division without reference to the part played by the 
brokers in the scheme of Food Control. Under the 
direction of Bird W. Housum the brokers of the coun- 
try were organized to assist the Food Administra- 
tion and at all times their loyal cooperation proved most 
invaluable. 

The rules required the broker to play the game fairly. 
He could not speculate or buy goods for his own ac- 
count unless he also operated a legitimate merchandis- 
ing business. His commissions were limited to the 
amount customarily enjoyed before the war, and he 
was allowed neither to give to nor receive from either 
buyer or seller, extra presents or commissions beyond 
the customary brokerage on the commodity sold. 

SPECIALTY MANUFACTURERS 

All manufacturers of proprietary package foods were 
organized for the purpose of more effective cooperation 
in carrying out the regulations and policies of the Food 
Administration. This Section of the Distribution Di- 
vision was under the direction of Frank Millard, who 



VOLUNTARY PROPAGANDA 153 

kept in constant touch with committees represent- 
ing the various lines of trade, and who, with their 
cooperation, drew up rules designed to effect substan- 
tial saving in the use of tin as containers for the various 
products, as well as the saving of man power and 
material, by the use of standard and uniform packages, 
thereby not only releasing large numbers of men for 
direct service, and saving steel and tin for the war in- 
dustries, but also effecting substantial savings in the 
cost of manufacture, which savings tended to reduce the 
gross manufacturers' margin, thus effecting a saving 
for the consumer. Under the supervision of this Sec- 
tion, also, extensive plans were drawn up for effecting 
economies in the wholesale grocery business designed to 
reduce and eliminate the abuse of the return goods evil, 
excessive deliveries, and unnecessary carrying in of 
goods by the teamster, and which also planned to elim- 
inate in large part the expense of repacking goods 
while in the hands of the jobber. The early termina- 
tion of the war alone prevented the latter rules from 
being made effective. 



CHAPTER XVII 

THE EIGHTY-TWENTY RULE CONCLUSION 

France, England and Italy at first prepared for a 
short war, and its duration for a period so much longer 
than anticipated almost overwhelmed them. The 
United States, not wishing to make the same mistake, 
prepared for a long war, and its early termination 
found the United States in a position where her tremen- 
dous power was just beginning to be felt, and which 
could not have reached its maximum before the summer 
of 1919, or possibly even later. So the Food Adminis- 
tration builded at all times as though the war would 
extend over a period of years, and the readjustments of 
an early peace were bound to cost considerably more 
than they would have cost if the exact duration of the 
war could have been foreseen and plans laid accord- 
ingly. 

The season of 1918 proved favorable to the wheat 
crop in America and to the crops in all the Allied coun- 
tries. Even without calling on the large reserves in 
Australia, it was seen that with the development of 
habits of economy in consumption both at home and 
abroad, there would probably be sufficient wheat sup- 
plies to tide us over another year. But this nation did 
not wish to risk the outcome of the war on the possi- 
bility of equally good crops for 1919. So it was de- 
cided that wheat conservation should continue through 
the year, in order if possible to provide a comfortable 
surplus of wheat to carry into the next crop year. 

154 



THE EIGHTY-TWENTY RULE 155 

After a conference between Mr. Hoover and the rep- 
resentatives of the Allied Powers, it was decided to rec- 
ommend a standard loaf of bread to be used throughout 
the entire Allied world, consisting of not more than 
eighty per cent, wheat flour. It was believed that this 
would not only afford a palatable loaf of bread which 
the housewife could bake successfully in her own home, 
but would result in providing sufficient wheat conser- 
vation to enable us to carry over approximately 150,- 
000,000 bushels of wheat into the next crop year. Ac- 
cordingly the new wheat conservation regulations 
known as the " 80-20 " rule were promulgated on Aug- 
ust 27th, and were made effective on September 1st, 
1918. 

Under these regulations, millers and wholesale deal- 
ers in flour were released from the necessity of selling 
substitutes with flour or even demanding certificates 
that the required amount of substitutes had been pur- 
chased. The combination sales rule was so amended 
that only the retailer could force the sale of substitutes 
with flour. 

The retailer was required to sell wheat flour in com- 
bination with other cereals on the basis of four pounds 
of wheat flour to one of substitutes. The required sub- 
stitutes for this purposes were limited to barley flour, 
corn flour and corn meal, one or more of which the re- 
tailer had to carry in stock at all times. The custo- 
mer might at his option purchase any of the following 
alternative substitutes on the same basis, if the retailer 
had them in stock : — Feterita flour and meals, kaffir 
flour, milo flour, rice flour, peanut flour, bean flour, 
potato flour, sweet potato flour, and buckwheat flour. 
Pure rye flour and meal could be sold as a substitute 
on the basis of two pounds of rye flour to three of 
wheat flour. 



156 DISTRIBUTION OF FOODS 

The consumer was expected to use such substitutes 
in Victory Bread mixture, and it was considered unpa- 
triotic for any housewife to bake bread that did not 
contain at least 20 per cent, of wheat substitutes. The 
rule prohibited any baker from baking or offering for 
sale bread or rolls that did not contain the required 
amount of substitutes. 

Mixed flours containing 20 per cent, of substitute 
flours and which conformed to the formula for Victory 
Flour could be sold without substitutes, as could also 
whole wheat and graham flour. 

There was no change in the list of substitutes for 
use by bakers, except that in the use of rye flour as 
a substitute such rye flour had to constitute at least 
40 per cent, of the mixture, while in the use of other 
substitutes the mixture could be on the basis of 80 per 
cent, wheat flour and 20 per cent, substitutes. 

Crackers were to contain not less than 10 per cent, 
wheat substitutes other than rye. The restrictions on 
the use of wheat in the manufacture of macaroni and 
breakfast cereals were removed. 

Jobbers and retailers were allowed to carry a sixty 
days' supply of flour. The rule limiting the sale of 
flour by retailers in quantities in excess of one-eighth 
and one-fourth barrel was also rescinded, as well as 
the rule limiting consumers to thirty days' supply. 

Every effort possible was made to encourage the 
manufacture and sale of Victory Mixed Flour, which 
was required to contain 20 per cent, of the substitute 
flours, but the operation of the Federal Mixed Flour 
Law imposing a tax on all mixed flour which contained 
more than 50 per cent, of the products of wheat oper- 
ated very strongly against the success of this plan, 
though a large percentage of millers undertook the 
manufacture of considerable quantities qf V^tory Flour 



THE EIGHTY-TWENTY RULE 157 

notwithstanding the handicap of the Federal Mixed 
Flour license and tax. 

The operation of this rule extended for only such a 
short period that it is unnecessary to discuss it in detail. 
In view of the large crop of oats and the comparatively 
small crop of corn, the propriety of excluding oat meal 
from the list of substitutes, and the inclusion of corn 
meal was questioned by many in the trade. The rea- 
son for this action by the Food Administration was 
that enormous quantities of oat meal were used as a 
breakfast food, while corn meal was more generally 
used as a substitute for wheat bread. No doubt the 
operation of this rule caused considerable grief to the 
housewife who had learned to bake oat meal bread under 
the operation of the " fifty-fifty " rule, but who was now 
required to purchase and learn to use other substitutes 
in addition to the oatmeal which she purchased for use 
in bread. 

As already stated, under the operation of this rule 
millers and wholesale dealers were released from selling 
substitutes to retailers and to bakers with wheat flour, 
or from demanding certificates that the substitutes 
had been purchased elsewhere. This change in the rule 
was made in order to permit the distribution of the 
substitute cereals to go back to its normal channels, 
as it was believed that this would result in their being 
handled on a lower margin. However the temptation 
of retailers and bakers to evade the rule was so great, 
that the old rule requiring the wholesale dealer and 
miller to sell substitutes with wheat flour, or to obtain 
certificates that the required amount of substitutes had 
been purchased, was about to be reestablished when the 
Armistice was signed. 

This event marked the beginning of an early end of 
food control by means of licensing regulations. The 



158 DISTRIBUTION OF FOODS 

necessity of carrying over a reserve of 150,000,000 
or more bushels of wheat into the next crop year was 
now no longer felt. The chance of securing an ac- 
cumulated wheat surplus of four years in the southern 
hemisphere through the release of shipping formerly re- 
served for the transportation of troops and supplies, 
and through the possible release of the merchant marine 
of the Central Powers, together with the enormous 
acreage and condition of the winter wheat crop, entirely 
changed the situation. It was now felt that as far as 
wheat was concerned one of the chief difficulties would 
be in carrying out the Government wheat contract 
with growers for $2.26 per bushel for the 1919 crop, 
which now appeared likely to exceed 1,000,000,000 
bushels. 

Furthermore there was an acute feed shortage both 
in the United States and throughout the countries of 
Europe, and it no longer seemed advisable to encourage 
the consumption of the coarse grains as food in place 
of wheat. 

Farmers had now become accustomed to the Govern- 
ment guaranteed price of wheat and they realized that 
they not only had nothing to gain by holding their 
grain, but that by so doing they would lose interest, 
storage expense and shrinkage, with no corresponding 
advantage. Accordingly it was their universal desire 
to sell their wheat as quickly as possible, and thus to 
secure immediately the maximum return permitted. 
The result was an unprecedented movement of wheat 
to market, which soon filled all available storage space, 
and congested all terminals, so that the Government 
was unable to take all wheat as fast as it was being 
offered. 

In view of these conditions it was deemed advisable to 
repeal the wheat substitute regulations entirely, as well 



THE EIGHTY-TWENTY RULE 159 

as all rules contingent upon them, and this was done 
November 12th. Soon afterwards the rules relative to 
a minimum wheat extraction, as well as all other rules, 
were also repealed. In order to relieve congestion in 
the elevators and warehouses, both jobbers and retailers 
were soon allowed to carry supplies for 90 days, and 
all rules limiting the quantity of flour to be sold were 
rescinded. 

The repeal of the substitute regulations found many 
millers and dealers with substitutes on their hands which 
had been purchased in excess of their normal require- 
ments in order to comply with this rule, and for which 
the demand immediately fell off. In order to avoid 
the waste of these products the Grain Corporation 
arranged to relieve such millers and dealers of some of 
their surplus stocks of the required substitute cereals 
and a considerable quantity of these products was thus 
taken off the market and exported to Europe. 

Many dealers also found themselves liberally stocked 
with certain flours on the optional substitute list for 
which the Grain Corporation up to January first had 
been unable to find a market in Europe. Probably the 
demand for such products will eventually reassert itself, 
and they will be used in the ordinary course of trade. 
The material advance in the price of corn which has 
taken place since the signing of the Armistice will no 
doubt ultimately result in conditions which will permit 
the sale of all existing stocks of substitute cereals with- 
out entailing too great a loss on the dealer. 

The exact date of the repeal of other rules and regu- 
lations of the Food Administration is not material for 
the purpose of this review. The members of the staff 
of the Food Administration while unanimous in the view 
that the arbitrary control of food distribution was 
necessary under the grave national peril which we have 



160 DISTRIBUTION OF FOODS 

just passed through, were also agreed that the con- 
tinuation of this control would be actually harmful 
to the public interests in normal peace times, and it was 
the desire of all to see the trade return to normal condi- 
tions as soon as possible. It is believed that some re- 
forms which have been effected in the methods of distri- 
bution will be continued by the trades voluntarily after 
the war. It is the policy of the Food Administration 
to withdraw all special regulations just as rapidly as 
it appeared safe to do so. By January 1st, 1919, the 
only important regulations affecting the wholesale and 
retail food trades still in effect were the maximum mar- 
gins and the anti-hoarding regulations. 

On January 10th, 1919, the President signed a proc- 
lamation canceling all license restrictions on the major- 
ity of products handled by the wholesale and retail 
grocers. Among the few important products still re- 
maining under license in the hands of the distributor 
were,! fresh meats, fats, vegetable and animal oils, 
grains, butter, cheese, eggs and sugar. This proclama- 
tion was released for the press January 12th. Special 
emphasis was laid upon the point that while the cancel- 
lation of the licenses carried with it the cancellation 
of the license regulations, the Food Control Act was still 
in full force and effect, and that no excessive profits, 
hoarding or other wrongful acts forbidden by statute 
would be allowed. 

This proclamation virtually closed the work of the 
Distribution Division. In summing up the records of 
achievements of the Food Administration in the control 
of the Food Trades, it should be borne in mind that at 
no time was it claimed that food control could give the 
people low prices in times of war. Many economic 
causes worked towards high prices for all food 
products. In fact practically everything entering into 



THE EIGHTY-TWENTY RULE 161 

the cost of food stuffs advanced in price two or three 
hundred per cent, and in most cases the advances in the 
cost of material and labor even preceded the advance 
in food stuffs. 

When prices of all commodities advance together, it 
is perhaps a misnomer to say that high prices prevail. 
The value of certain commodities as exchanged with 
labor or with any other commodities may remain fairly 
constant, while their value when measured in terms of a 
single commodity — gold — may show a change in rela- 
tionship entirely out of proportion to the change in 
their relative values among themselves. In war times, 
therefore, there is a constant change in the relationship 
of commodities as a whole as compared to the value of 
the single commodity — gold. In such cases it is just 
as proper to state that gold is cheap when measured in 
terms of commodities, as that commodities are high 
when measured in terms of gold. 

During the period of the great war we found that 
not only had the production of commodities been 
greatly interfered with by the turning of many mil- 
lions of men to fighting, but that in this warfare vast 
quantities of commodities were constantly being burned 
up and wasted in a way which carried them entirely 
out of the channels of further production. On the 
other hand, the Governments of the warring nations re- 
leased billions in gold from their war chests, and pri- 
vate hoards of gold were turned into the channels of 
trade, for the purpose of securing necessary supplies, 
or for buying Government bonds. The increase of 
Government paper money and bank notes rendered gold 
less needed as a circulating medium, and especially the 
habits of economy and thrift forced on all by the war, 
almost stopped the use of gold in the making of expen- 
sive ornaments or other useless decorations. 



162 DISTRIBUTION OF FOODS 

It is evident therefore, that the vast increase in the 
available supply of gold, coupled with the enormous de- 
struction of commodities in the war itself, resulted in a 
condition of exchange value between the two in favor of 
commodities, which no law or regulations could have 
averted. An attempt to arbitrarily hold down the 
price of food stuffs with everything else advancing 
would only have served to discourage production to 
such an extent that the war would undoubtedly have 
been lost. 

The Food Administration undertook to prevent ex- 
cessive profits, hoarding and unfair practices generally, 
which was all that the law contemplated, and its suc- 
cess in this direction is beyond all question of doubt. 

At the present writing, a large portion of Europe lies 
prostrate and famine stricken. The peoples of the 
Central Powers, and especially those of Russia and 
of the territory formerly occupied by the Teutonic 
armies, are actually enduring more acute food short- 
age in all the larger cities, and actual starvation, es- 
pecially among the poorer classes, is rampant. It 
seems almost inevitable that before another harvest 
millions must die of starvation and from other diseases 
induced by undernourishment. The situation is far 
from reassuring. Possibly much fighting will still be 
necessary to establish stable governments in Russia and 
in other parts of Europe. Dissensions important in 
character are beginning to break out among the lesser 
allies. Our duty to the world is only half performed. 
All of the blood and suffering in the great world's war 
will have been spent in vain if it proves impossible to 
reestablish stable governments in Europe. A stable 
government cannot be maintained with a starving and 
hopeless population. Some means must be found of re- 
lieving the famine conditions prevailing, and of giving 



THE EIGHTY-TWENTY RULE 163 

hope again to the peoples of the defeated nations, in 
order that economic and political stability may be re- 
established. 

The European peoples must, therefore, be given suf- 
ficient food for their immediate physical requirements. 
No possible good can come to the world in inflicting 
peace terms on the defeated nations that will keep them 
hopeless and in perpetual servitude. Such a situation 
would only result in permitting the cancer of anarchy 
continually to eat at the very vitals of modern civiliza- 
tion. Now is the time to restore peace and happiness 
where possible, not to engross one's self in petty plans 
for empty vengeance. 

With the signing of the Armistice the American peo- 
ple lost one of the principal incentives for conserva- 
tion. They have been taught a considerable measure 
of self-denial which was practiced as long as they felt 
that the lives of our boys in France depended directly 
on the amount of sacrifice at home. But there is some 
doubt as to whether they will actually eat less in order 
to relieve the famine conditions among their former 
enemies. Without doubt habits of thrift and the avoid- 
ance of waste which have been taught by the war will 
continue for some time, but real self-denial in food 
other than that imposed by economic necessity seems 
to be practically a thing of the past. 

There is not enough food to last the world till another 
harvest. In case all the available supply is equitably 
distributed, perhaps real starvation can be avoided. 
The operation of the law of supply and demand itself 
works out a sort of forced conservation of those articles 
of which there is a shortage, and perhaps the best solu- 
tion is to allow it to have free sway, and the self-in- 
terest of individuals will perhaps cause a quick readjust- 
ment of prices and distributive conditions, which will 



164 DISTRIBUTION OF FOODS 

not only serve to effect the necessary conservation, but 
will afford the peoples of devastated Europe the earliest 
opportunity to help themselves, where they are able to 
do so, so that the work of the American Commission 
for the Relief of Europe will be largely directed to ren- 
dering assistance to those peoples who are so wholly 
prostrate as to be in no condition to help themselves. 

The writer believes that true patriotism will shine 
as brightly in peace as in war, and that the era when 
the sole controlling factor in the conduct of business 
was the hope of private gain is gone forever. It is his 
belief that if the business men of this country are 
given the chance to do so they will quickly readjust 
themselves to the needs of the world at this great crisis, 
and that private initiative will quickly find a way to co- 
operate with Mr. Hoover and with the American Com- 
mission for the Relief of Europe in order to bring the 
necessary food to Europe's starving millions. 

It is hoped that it will soon be possible to remove the 
remaining measures of war time control of foods, and 
that the export embargo, and the trading with the 
enemy restrictions, may be modified at an early date, so 
that all who can help themselves may be permitted to 
do so, and in the end it may be said that food from 
America not only won the war, but that it also made 
the fruits of victory permanent through the quick re- 
lief offered to Europe in this hour of the world's great- 
est need. 



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165 



DANA TARBELL ACKERLY 

Dana Tarbell Ackerly was born in Pennsylvania, August 15th, 
1880. 

He received the degree of B.A. in Williams College, in 1901, and 
of LL.B. in Harvard University Law School, in 1904, and is a 
member of the Phi Beta Kappa. 

He early entered the practice of law with the firm of Breed, 
Abbott & Morgan, of New York City, which firm acted as counsel 
for the National Wholesale Grocers' Association from the begin- 
ning of its history. Mr. Ackerly has proved extremely valuable 
to that organization and his counsel was at all times relied upon 
in the many difficult and perplexing problems which were pre- 
;ented for solution. 

He is President of the Cadiz Gas Company, and Vice President 
of the Octo Oil Company, and is a member of the Bankers Club of 
America, the Harvard Club of the City of New York, the Asso- 
ciation of the Bar of the City of New York, and of the Chevy 
Chase Club of Washington. 

He is also a National Councillor of the Chamber of Commerce 
of the United States. 

Mr. Ackerly served as chief of the Wholesale Section of the 
Distribution Division from June 28th, 1917, to April, 1918, when 
on account of ill health he was compelled to relinquish his work 
for a time. Unfortunately his recovery was not sufficiently rapid 
to permit him to resume his duties during the life of the Food 
Administration. His sane counsel and patriotic efforts in the 
early history of the Food Administration were invaluable in help- 
ing to organize and establish the Distribution Division along the 
proper lines. 

His business address is 32 Liberty St., New York City. 



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167 



WALTER F. BLAKE 

Walter F. Blake was born in Brooklyn, New York, October 19tl\ 
1865. He early entered the business of dealing in green coffee, 
and is a member of the firm of Williams, Russell & Company, 
101 Front Street, New York City. 

He came to Washington June 25th, 1918, and served with Mr. 
Lawrence in the Coffee Section till the close of the work of the 
Food Administration. 

He is a member of the New York Club, the Brooklyn Club, the 
Greenwich Country Club, and the Hamilton Club of Brooklyn. 

He resides at 30 East 58th Street, New York City. 










169 



ROLAND WILLIAM BOYDEN 

Roland William Boyden was born at Beverly, Mass., October 
18th, 1863. He graduated from Harvard College, receiving the 
degree of A.B. in 1885, and from Harvard Law School in 1888, 
receiving the degree of LL.B. He practiced law with the firm of 
Ropes Gray, Boyden & Perkins, Boston, Mass. 

He is president of the Beverly Savings Bank, Beverly, Massa- 
chusetts, Director of the First National Bank, of Boston, of the 
Beverly National Bank of the Quincy Market Cold Storage & 
Warehouse Company, of the Eastern Manufacturing Company, 
Bangor, Maine, and of the Clinton Wire Cloth Company, Boston. 

He came to Washington November, 1917, to take charge of 
enforcement cases for the Distribution Division. This work 
soon assumed such great importance that the Enforcement Divi- 
sion was founded, of which he was the head. 

As " Hoover's Hangman " he became the most popular execu- 
tioner in the United States, and even those who were required 
to pay the penalty for misdeeds, acknowledged the fairness 
which at all times characterized the activity of this branch of the 
Food Administration. 

He is a member of the Bar Association of Boston, and of the 
Harvard, Exchange and Home CJubs of that city. 

His business address is 60 State Street, Boston, and his home 
address 12 Washington Street, Beverly, Massachusetts. 




171 



MAX A. CHRISTOPHER 

Max A. Christopher was born at Warrensburg, Missouri, in 
1878. He received a business education and entered the employ- 
ment of Aultman & Taylor Machinery Company, of Kansas City, 
in 1898, remaining with that company five years. In 1904, he 
purchased an interest in the Warrensburg Wholesale Grocery 
Company of Warrensburg, Missouri, and became Secretary of the 
Company. In 1908 he organized and became President and man- 
ager of the Christopher-Thurber Grocery Company of Trenton, 
Missouri. A few years later he organized another grocery com- 
pany under the name of the Jennings-Christopher Grocery Com- 
pany of Center ville, Iowa, also becoming President of this com- 
pany. 

He became associated with Mr. McCoy in the Report Section 
March 1, 1918, and continued in the work of examining reports 
till the jobbers' reports were discontinued in July of the same 
year. He then entered the Field Supervision work, and rendered 
valuable service in that connection. 

He is a member of the Riverside Country Club and the Elks" 
Club, both of Trenton, Missouri. He resides at 1620 Lin wood 
Boulevard, Kansas City, Missouri. 







173 



OMAR H. CHEER 

Omar H. Cheer was born at Williamstown, Massachusetts, in 
1872. He became connected with .Siegel, Cooper & Company of 
New York City, as grocery salesman, in 1899. He later became 
manager of the grocery department of the 14th Street Store of 
New York City, and in 1913, became Treasurer and Manager of 
McCann & Company, Inc., Pittsburgh Pa., one of the largest and 
best equipped retail food markets in the country. 

He became associated with the Retail Section of the Distribu- 
tion Division in July, 1918, and took part in the work of establish- 
ing permissible retailers' profits in butter, eggs, cheese and oleo- 
margarine, remaining with the Food Administration till after 
the signing of the Armistice. 

His permanent address is 415 Market Street, Pittsburgh, Pa. 




175 



WALTER ELLSWORTH COE 

Walter Ellsworth Coe was born at Meriden, Conn., in 1870. 
He graduated from Yale in 1892, later studying law at the same 
institution, completing his law course in 1902. 

He engaged in the pork packing and provision business from 
1892-1902, after which time he practiced law. 

He became associated with Mr. Lichty in the Retail Section, 
November 6th, 1918, and remained till January 1st, 1919. 

He resides at Stamford, Connecticut, his business address being 
165 Broadway, New York City. 






SCOTT F. EVANS 

Scott F. Evans was born in Ohio, in 1874. He graduated from 
the University of Minnesota Law School in 1897, and soon there- 
after entered into the engineering and contracting business, mak- 
ing a specialty of milling engineering. For the past ten years he 
has erected many large mills for milling corn and other cereal 
products throughout the West and Northwest. 

He is manager of the Baltimore Pearl Hominy Company, and 
was Chairman of the committee of the National Association of 
Corn Millers, appointed to represent that industry at Washington. 

In October, 1917, he was called by Mr. Hoover to take charge 
of the Corn and Oats Section of the Distribution Division. As 
the work of the Division grew, however, it was found necessary 
to form a separate Coarse Grains Division, and Mr. Evans re- 
mained associated with Mr. Stream of that Division until the 
close of the Food Administration. 

He resides at 1217 Cathedral Street, Baltimore, Maryland. 




179 



CHARLES HATFIELD 

Charles Hatfield was born in Lebanon, Ohio. After finishing 
the public schools he attended the Ohio State University, dur- 
ing which time he became a member of the Phi Delta Theta. 

In 1887 he moved to Colorado and became associated with the 
Henkel-Duke Mercantile Company, wholesale grocers, acting in 
the capacity of bookkeeper and road salesman. Four years later 
he became associated with the Morey Mercantile Company of 
Denver, Colorado, and later became Department Manager and 
Buyer for that company, remaining with them eighteen years. In 
1915 he bought an interest in the H. A. Marr Grocery Company 
of Denver and the name was changed to Marr-Hatfield Grocery 
Company. In 1918 he disposed of his interest in this concern to 
Mr. Harry Marr and became affiliated with the J. S. Brown Mer- 
cantile Company of Denver. 

At the request of the Food Administration he came to Washing- 
ton, February 6th, 1918, for the purpose of assisting in the exam- 
ination of wholesale grocers' reports. After the discontinuation of 
these reports in July, 1918, he became attached to the Sugar 
Distributing Section, acting as Assistant to Mr. Zabriskie. When 
the latter was made Chief of the Distribution Division in October 
Mr. Hatfield took charge of this section and continued in that 
position until the sugar certificate plan was withdrawn Decem- 
ber 1st. 

His task of handling the section of sugar distribution was one 
of the most perplexing and arduous of all those which the Food 
Administration had to handle and he at all times proved himself 
capable and efficient. 

Mr. Hatfield is a member of the Denver Athletic Club, Denver 
Country Club, and Knights Templar and Shrine of the Masonic 
Fraternity. 

His home address is 1300 Madison Street, Denver, Colorado. 




181 



FRANK A. HOEY 

Frank A. Hoey was born in 1885 and received his education in 
the public schools of New York City. After eight years spent 
with the New York Central R. R. and the American Locomotive 
Automobile Co., in 1911 he entered the flour business in the 
employ of Geo. A. Zabriskie. On December 15th, 1917, Mr. Hoey 
went to Washington as assistant Chief of Flour Distribution for 
the Food Administration, and later when Mr. Zabriskie was made 
Head of the Distribution Division, Mr. Hoey's thorough knowledge 
of the flour situation caused him to be appointed Chief of Flour 
Distribution. 







183 



HERBERT C. HOOVER 

Herbert Hoover was born in an Iowa village in 1872. He was 
of Quaker parentage but lost both his father and mother while 
still very young and his early years were spent with farming 
relatives, first in Iowa and subsequently in Oregon, who reared 
him to the strict tenets of the Quaker doctrines. At fourteen he 
secured a job as office boy at Salem, Oregon, and earned a living 
from that time on. Plans were made by Quaker relatives to 
send him to some small Quaker college, but Hoover rebelled at 
the thought of the narrow outlook which this afforded, and an- 
nounced his intention of securing an engineering education at 
some of the larger educational institutions. 

He entered Stanford University in 1891, where he graduated 
four years later in the department of mining and geology, earning 
his way through the University. During his senior year he was 
elected treasurer of the student body, and thus early demon- 
strated his ability as a business organizer by the thorough and 
efficient work done in that capacity. 

After leaving the University, Hoover worked as a miner for 
some time to learn the details of mining operations, and then 
associated himself in a minor capacity with Mr. Louis Janin, a 
prominent mining engineer of San Francisco. He soon demon- 
strated his ability and was rapidly advanced, being sent to ex- 
amine and reorganize mining properties in many Western states. 

After remaining with Mr. Janin for some time he was offered 
a position with a firm in Western Australia, where he remained 
till 1899, organizing and developing mining properties with suc- 
cess in a most inhospitable and waterless region. In 1899, he 
accepted the position of Chief Engineer of the Northern Chinese 
Administration, and spent one year in traveling over various 
provinces of China, making reports and investigating the mining 
properties throughout the Empire. 

He was caught at Tientsin with his entire staff of native Chinese 
at the time of the Boxer insurrection in 1900. During the siege 
of that city his ability as an emergency organizer was most 
strikingly demonstrated. Throughout these troublesome times in 
China, Mr. Hoover, at the risk of his own life, frequently inter- 
vened to protect innocent Chinese who through this reign of terror 
were constantly being arrested and summarily executed. 

After the Boxer disturbances Mr. Hoover returned to Cal- 
ifornia and was subsequently appointed general manager of a large 
railway, coal mining and shipping company in China. Again 
returning to California after a year of service he accepted the 
technical direction of a large international firm of metallurgical 









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and mine operators with operations in the United States, Africa, 
Russia, Asia, Australia and Mexico. 

In 1908 Mr. Hoover resigned this association to undertake the 
direction of a larger group likewise engaged in metallurgical, 
railway and mining operations in various parts of the world. 
When the war broke out in 1914, Mr. Hoover happened to be at 
the London offices of this group. He at once organized the Amer- 
ican Relief Committee. By means of pledges of personal credit, 
this Committee was able to assist some 90,000 stranded Americans 
in obtaining passage to their native country. When the desperate 
situation of the Belgians in the territory that had been overrun 
by the Germans became known, Mr. Hoover converted the Amer- 
ican Relief Committee into the Commission for Relief in Belgium. 

For nearly three years Mr. Hoover gave his entire time to the 
directing of the feeding of ten million Belgians and French under 
German occupation. The Commission grew to complete confidence 
of all the belligerent governments, and under governmental and 
charitable support of the British, French and American govern- 
ments, expended nearly a billion dollars in the purchase, transport 
and distribution of over five million tons of food — at a cost of less 
than three-eighths of one per cent, for overhead. 

When America entered the war Mr. Hoover added to his other 
duties as head of the Belgian Relief the office of United States 
Food Administrator. 

From the time of the organization of the Food Administration, 
Mr. Hoover's career is known to every school boy. His per- 
sonality, his stern integrity, his humanitarianism entered into and 
directed his every act. He set himself to organize the food 
forces of a democracy to fight a war, and to fight it efficiently 
in a democratic way, and he succeeded. 



BIRD W. HOUSUM 

Bird W. Housum was born in Ohio in 1860. He started busi- 
ness as a merchandise broker under the name of B. W. Housum 
& Company in 1885. Five years later, this firm was incorporated 
under the name of Housum-Grace Company, Mr. Housum becom- 
ing President of the corporation, continuing actively in this 
business till called to the service of the Food Administration. 

From 1906 to 1908 he served as President of the Ohio Whole- 
sale Grocers' Association. He is a member of the Union, Tavern, 
and Cleveland Country Clubs, and of the Advisory Board of the 
Citizens' Savings & Trust Company of Cleveland. He is a 32nd 
degree Mason and a member of the Mystic Shrine. 

He served with the Distribution Division from October 1st, 1917, 
to January 15th, 1919, acting as Chief of the Brokers' Section, 
and as general trade advisor. 

His efforts were largely responsible for the enthusiastic support 
which the brokers gave the Food Administration at all times. 

He resides at 2269 Coventry Road, Cleveland, Ohio. 




189 



JAMES WRIGHT HUNT 

James Wright Hunt was born at Martinsville, Ohio, January, 
1868. He attended Wilmington College 1884 to 1887, Johns Hop- 
kins University 1887-9 and was graduated from Harvard Law 
School 1892. 

He entered the general practice of law in Duluth, Minnesota, 
in which vocation he has continued up to the present time. In 
August, 1918, he was called to Washington to succeed Mr. R. R 
Williams as Chief of the Wholesale Grocery Section of the Dis- 
tribution Division, and notwithstanding his lack of previous ex- 
perience in problems of Food Administration, he performed his 
duties with the highest degree of efficiency and proved himself 
extremely valuable to the Food Administration. 

He is a member of the Kitchi Garrison Club, Commercial Club, 
and the X Club of Duluth, Minnesota, and is an associate mem- 
ber of the Cosmos Club, Washington, D. C. 

His permanent address is Duluth, Minnesota. 




191 



BENJ. R. JACOBS 

Benj. R. Jacobs, technical expert of the Baking Division, has 
served in the Bureau of Chemistry, Department of Agriculture, as 
a chemist in charge of the cereal investigation work of that 
Bureau for eleven years. 

In 1914 to 1916 he served as Cereal Technologist for the 
Canadian Government, and was located at Winnipeg, Manitoba, 
Canada, doing work in connection with the enforcement of the 
Grain Standards Act. 

His technical knowledge and investigations proved extremely 
valuable to the Baking Division in its attempt to establish stand- 
ards for bread, with a view of directing bakers in the production 
of a wholesome loaf at the lowest possible cost. 

Late in the fall of 1918 he left the Food Administration, having 
obtained a Commission for service in the Army. 




193 



L. T. JAQUES 

L. T. Jacques was born in Chicago, Illinois, 1878. He received 
the degrees of PH.B. at Yale, and of LL.B. at the Northwestern 
University Law School. 

He is Vice President of the Jacques Manufacturing Company, 
manufacturers of the K C Baking Powder. 

He came to the Food Administration in August, 1918, and was 
associated with the Retail Section, assuming charge of price 
publication. 

He is a member of the Chicago Athletic Club, Glen View Golf, 
University, South Shore Country Club, Chicago Yacht Club, and 
the Yale Club of New York City. He is a member of the Order 
of the Coif at the Northwestern University, and resides at 6134 
Kenmore Avenue, Chicago, Illinois. 




195 



PARKER JONES 

Parker Jones was born in 1877. Pie graduated with the Degree 
of B.A. from Tufts College, and later graduated from George 
Washington University Law School, with the degree of LL.B. 

In April, 1901, he entered the service of the Department of 
State in the Bureau of Trade Relations and the Bureau of 
Citizenship, where he continued until 1908, when he was trans- 
ferred to the office of the Solicitor, Department of Agriculture. 

In the fall of 1911 he became first Assistant Solicitor, and in 
August, 1915, was appointed Assistant Chief of the Bureau of 
Chemistry, where he remained until January 1st, 1917, at which 
time he resigned and took up the practice of law in Washington, 
D. C, specializing on food control. 

He became associated with the Distribution Division and took 
charge of the Complaint Section November, 1917, ana on the 
organization of the Enforcement Division he continued with the 
Food Administration under Mr. Boyden. 

His business address is 801 Union Trust Building, Washington, 
D. C. 




197 



HENRY J. LAHEY 

Henry J. Lahey was born in New York City. 

He early entered the employment of Francis H. Leggett & 
Company, and has been associated with that Company for the 
past ten years. Throughout the entire history of the Food Admin- 
istration he acted as assistant to Mr. T. F. Whitmarsh, at all 
times seconding the strenuous activity of his Chief by faithful, 
consistent and efficient work. 

His permanent address is care of Francis H. Leggett & Com- 
pany, New York City. 



MAURICE E. LANDAUER 

Maurice E. Landauer was born in Baltimore, Maryland, Febru- 
ary, 1886. 

He is a graduate of the Baltimore City College and is Secre- 
tary-Treasurer of Harrison-Landauer, Inc., Baltimore, general 
advertising agents and commercial illustrators. 

He acted as assistant to Mr. Scott B. Evans of the Corn and 
Oats Section of the Distribution Division, later affiliating himself 
with the Coarse Grains Division under Mr. Stream. 

He resides at 3210 Walbrook Avenue, Baltimore, Maryland. 




201 



GEORGE W. LAWRENCE, CHIEF 

George W. Lawrence is a native of Prairie du Chien, Wis- 
consin. 

In 1872 he became connected with J. W. Doane & Company, 
coffee merchants of Chicago, and remained with them nineteen 
years, working up from office boy to Assistant Manager. 

In 1891 he founded the concern of the Wisconsin Refrigerator 
Company, of Eau Claire, Wisconsin, which he operated for four 
years. He then returned to the coffee business and was a partner 
in the firm of Winchester, Lawrence & Company of Chicago and 
New York, and later of Lawrence, Brown & Company of New 
York City. Some time later he entered the coffee commission 
business under the trade name of George W. Lawrence & Com- 
pany of New York City, representing a number of foreign export- 
ing companies. 

He became president of the New York Coffee and Sugar Ex- 
change in 1917 and was acting in that capacity when he was 
called to Washington to take charge of the Coffee Division. Mr. 
Lawrence remained in this capacity until the close of the Food 
Administration activity. 

He is a member of the Down Town Association of New York 
City, the New York Athletic Club, the Hamilton Club of Brooklyn, 
New York and the Chicago Yacht Clubs. 

His home address is Pelham Manor, New York City. 




203 



HENRY THEODORE LEGGETT 

Henry Theodore Leggett is the only son of the, late Theodore 
Leggett of New York City, who with his brother Francis H. 
Leggett in 1870 founded the well known wholesale grocery firm of 
Francis H. Leggett & Company, New York City. 

Mr. Leggett did not enter actively into business, but studied 
painting at the Art Students' League, New York City, Julien's in 
Paris, and with E. Cook, pupil of Ruskin, in London. His paint- 
ings were exhibited in New York at the National Academy of 
Design and Society of American Artists. 

He is a charter member of the New York Stage Society, and 
of the Work Shop Theatre of New York. He is a director in the 
Building of Arts, Bar Harbor, Maine, and is a member of the 
Union League Club of New York, the Travellers' Club in Paris, 
and the Society of Arts and Sciences of New York City. 

He came to Washington August 20, 1917, as a volunteer for the 
Food Administration, remaining till the close of its work, and 
proved ot invaluable assistance to his cousin, Theodore F. Whit- 
marsh, Head of the Distribution Division. 

His permanent address is 39 W. 55th St., New York City. 







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205 



J. R. LEGUENEC 

J. R. Leguenec was born in Abbeville, Louisiana, in 1870. After 
graduating from the Commercial College of Kentucky University, 
Lexington, Kentucky, he was at the age of 24 elected mayor of 
Abbeville, and was subsequently reelected and served ten years. 

Later he entered the employment of the United States Depart- 
ment of Agriculture, in the Bureau of Statistics under Mr. Victor 
H. Olmsted, and served as States Statistical Agent, making 
estimates of all the crops grown in Louisiana. In 1909 he re- 
signed from this position to become the Secretary of the Rice 
Millers' Association with headquarters at Beaumont, Texas, where 
he now resides. 

For the rice industry he has built up a system of reports of 
production, receipts and distribution, which show the movement 
of the crops from the farmer to the manufacturer and from the 
manufacturer to the distributor and are recognized as the most 
authentic data obtainable. 

From the time he began the work for the Rice Millers' Associa- 
tion the production has increased over 40 per cent., and without 
doubt his personal efforts have had something to do with this 
increase. 

Mr. Leguenec came to Washington and assumed charge of the 
Rice Section of the Distribution Division in August, 1917, and 
continued till the close of the Food Administration activity. As 
he possessed a most intimate personal knowledge of every phase 
of the rice industry his services proved most invaluable. He is a 
member of the Beaumont Country Club, Beaumont Elks Club, and 
of the American Statistical Association of Boston. He resides at 
Beaumont, Texas. 




207 



GEORGE E. LICHTY 

George E. Lichty was born in Lavansville, Somerset County, 
Pennsylvania, July 21, 1857, the son of John H. and Mary A. 
Lichty, his mother dying when he was ten years of age. During 
the years 1868 and 18G9, on account of the ill health of his 
father, he lived with an uncle in Pennsylvania, attending district 
school four months each year. In the spring of 1870 with his 
father, he moved to Waterloo, Iowa, where during the summers 
of 1870 and 1871 he worked on a farm, going to school during the 
winter months. 

Early in 1872, and for two years, he was errand boy in a clothing 
store. During a part of this time he attended night school three 
nights each week. Following that, for five years he was em- 
ployed, first as delivery boy and later as a clerk in a retail 
grocery. 

In October of 1879, he went into the retail grocery business, 
continuing until December 1st, 1889. Early in 1890 he, with E. B. 
Smith and B. S. Hillman, organized the wholesale grocery com- 
pany of Smith, Lichty & Hillman Co., Waterloo, Iowa. He 
traveled for ten years as a salesman selling groceries for this 
institution. He was elected President of the Company in 1903. 

He is at this time President of the Black Hawk Coffee and 
Spice Company; President of the Waterloo Canning Company; 
President of the Waterloo Warehouse and Storage Company; 
Vice President of The Commercial National Bank, all of Water- 
loo, Iowa; and Vice President of the Vinton Canning Company, 
Vinton, Iowa. 

He served as the fifth President of the National Wholesale 
Grocers' Association from June, 1912, to June, 1913. 

In September, 1917, Mr. Lichty at the earnest solicitation of 
Mr. Hoover and Mr. Whitmarsh was called to Washington to act 
as Chief of the Retail Section of the Distribution Division. He at 
once volunteered his services to the Government and has served 
continuously in that capacity. 

He resides at 403 Franklin Street, Waterloo, Iowa. His busi- 
ness address is 119 East Park Avenue, Waterloo, Iowa. In 1881 
he married Annie M. Derrick, of Waterloo. One of his boys, 
Robert J. Lichty, served in the United States Army. 

Mr. Lichty's practical knowledge and experience, coupled with 
his enthusiastic patriotism, was largely responsible for the close 
cooperation which the retail trade of America so willingly gave 
the Food Administration. 



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209 



CHARLES LESTER McCOY 

Charles Lester McCoy was born at Peoria, Illinois, in 1877. He 
graduated from Princeton University in 1898, receiving the degree 
of A.B. After studying law two years, he entered active business 
with the wholesale grocery firm of The James-McCoy Company, 
founded in 1870, Peoria, Illinois, working up to the position of 
Vice President. 

He came to Washington in December, 1917 s and remained till 
January 20, 1919. He was associated with the Distribution Divi- 
sion as Chief of the Report Section and finally, together with 
Mr. J. W. Gould, effected a complete reorganization of the license 
report system. He acted as Chief of the Baking Section, and 
member of the Rules Committee. His judgment could be relied 
on at all times as both sound and conservative. He is a member 
of the Peoria Country Club, and his permanent address is care 
of The James-McCoy Company, Peoria, Illinois. 




211 



HENRY STEPHENS MAC PHERSON 

Henry Stephens MacPherson was born at Maiden, Massa- 
chusetts, in 1868. He is a graduate of Harvard College and 
of Harvard Law School, and practiced law at Boston, Massa- 
chusetts. 

He came to Washington March 12th, 1918, and was associated 
with Mr. Boyden in the Enforcement Division. 

He is a member of the Harvard Club of Boston, Massachusetts, 
where he resides. 




213 



ALBERT N. MERRITT 

Albert .N. Merritt is a native of Illinois. When eight years of 
age he ltfst his father in an accident, and was thus thrown on his 
own resources, which resulted in his operating a fruit farm in 
northern Illinois at the age of fifteen. 

He received the degrees of A.B. Battle Creek College, Michigan, 
1899: A.B. Leland Stanford University, California, Department 
of Latin, 1901: A.M. University of Chicago, 1904; Ph.D., Political 
Economy and Political Science, University of Chicago, 1906: LL.B. 
Chicago Law School, and was admitted to the Illinois State Bar 
in 1911. 

Unable to overcome the thirst for adventure, in 1901 he shipped 
from San Francisco on a French bark bound around the " Horn " 
for Europe, and for one year as a seaman on various sailing 
ships visited many parts of the world and saw some of its rough 
edges. 

While at the University of Chicago, he took part in three inter- 
collegiate debates, representing that institution against North- 
western, Minnesota, and the University oi Michigan, In addition 
to a number of cash prizes and a gold medal for debating, the 
University gave him two annual scholarships, and finally a fellow- 
ship, in the Department of Political Economy. For two years 
he served as President of the Political Economy Club of the 
University. 

His doctor's thesis, " Federal Regulation of Railway Rates," 
published by Houghton Mifflin & Company, was awarded the first 
prize of $1000 offered by Hart, Schaffner & Marx for the best 
annual essay on the subject of Practical Economics, in 1906. 

The same year he became professor of Political Economy and 
History in Knox College, Galesburg, Illinois. He soon left this 
position to become the Secretary-Treasurer of the Wholesale 
Grocers' Exchange of Chicago, which position he has held since. 
He is organizer and manager of the Foods Trades Credit Associa- 
tion of Chicago, and was Secretary-Treasurer and Associate Man- 
ager of the Joint National Committee on Canned Foods Week 
for 1913. 

Mr. Merritt came to Washington early in October, 1917, at the 
request of Messrs. Whitmarsh, Ackerly and Lichty. He had 
charge of the publicity work for the Distribution Division, includ- 
ing dealers' pledges, and of the cooperating activities of whole- 
sale grocers' salesmen. It was also his function to see that the 
various state and local wholesale grocers' association were kept 
in constant touch with Food Administration activity, and informed 
of important changes in the regulations. In August, 1918, he be- 
came correspondence censor for the Distribution Division, and 
served till the first of February, 1919. 

He resides at 1443 East 60th Street, Chicago, Illinois. 




215 



FRANK HOPKINS MILLARD 

Frank Hopkins Millard was born at Milwaukee, Wisconsin, in 
18(i3. He is Director and Western Sales Manager of the Diamond 
Crystal Salt Company of St. Clair, Michigan. 

He came to Washington November 8th, 1917, and remained 
with the Distribution Division until after the signing of the 
Armistice. He served as Chief of the Section dealing with manu- 
facturers of all proprietary food products and also had charge of 
the Commercial Conservation Section of the Distribution Division. 
During the entire period of his service, he was almost con- 
stantly in session with committees of manufacturers, wholesale 
grocers and others, devising means for saving man power and 
material, especially tin plate, and the loyal cooperation given by 
all three interests proved a distinct factor in releasing men and 
necessary materials for direct war service. 

He is a member of the Illinois Athletic Club of Chicago, serving 
as President from 1914 to 1915. He is also a member of the 
South Shore Country Club and of the Flossmoor Country Club of 
that city. 

He resides at the Illinois Athletic Club, Chicago. 




217 



LOUIS HORACE SAWYER 

Louis Horace Sawyer was born at Boston, Massachusetts, in 
1892. He graduated from the Boston University Law School, 
receiving the degree of LL.B. in 1912. He was admitted to the 
Massachusetts State Bar and practiced law in Boston, being asso- 
ciated with the firm of Dana B. Gove & Sons. 

He is a member of the Knights of Pythias and of the Press 
Club of Boston. 

He came to Washington in December, 1917, and was employed 
in investigating complaints of violations of the law, for the Dis- 
tribution Division, till May, 1918, when he was transferred to the 
Enforcement Division. 

He resides at 90 Fuller Street, Brookline, Massachusetts. 




219 



HARRY DEAN TIPTON 

Harry Dean Tipton was born at Heresford, England, 1875. He 
attended St. Michaels School and College, at Tenbury, England, 
and came to this country in 1892, becoming an American citizen 
in 1898. 

He entered Wesley an University, at Salina, Kansas, and after 
graduating he entered the employment of Westermann, Trader & 
Company, Certified Public Accountants, making a specialty of 
Bakery accounting. He assisted in the organization and con- 
solidation of the American Bakery Company, St. Louis; the 
Consumers' Bread Company, Kansas City, Missouri, and the 
Shults Bread Company, of New York City. He is now a director 
of the latter company. 

He came to Washington in January, 1918, and continued as 
Trade Advisor to the Chief of the Baking Section. 

He is a member of the Crescent Athletic Club of Brooklyn, 
Canadian Club of New York City, Elks Lodge and Scottish Rite 
Masons of Kansas City, Missouri. 

His permanent address is 26 Beaver Street, New York City. 




221 



FRANK SEDGWICK TRACY 

Frank Sedgwick Tracy was born at Syracuse, New York, in 
1879. He attended Cornell University, receiving the degree of 
B.S. in 1900. After graduating he immediately entered employ- 
ment as traveling salesman for O. V. Tracy & Company, whole- 
sale grocers, of Syracuse. He gradually worked up till he be- 
came Vice President and Director of the Corporation, which posi- 
tion he holds at the present time. 

He came to Washington in February, 1918, and continued with 
the Food Administration till July 1, 1918, being associated with 
Mr. McCoy in the Report Section, examining monthly reports of 
jobbers and brokers. 

He is a member of the Century Club, the Onondaga Golf and 
Country Club, the Citizens Club, the x\utomobile Club, and the 
Cornell Club, all of Syracuse. 

He resides at 105 Sedgwick Drive, Syracuse, N. Y. 




223 



HARRY FEARN VORIES 

Harry Fearn Yories was born in St. Joseph, Missouri, in 1856. 
He entered active business with F. L. Sommer & Company, in 
1876. He became Secretary of the Huggins Cracker & Candy 
Company of Kansas City, in 1882, and of the American Biscuit 
& Manufacturing Company of Chicago, in 1890. In 1898 he was 
elected First Vice President of the National Biscuit Company, 
which position he held until 1906. At the present time he is 
Director of the Iten Biscuit Company, of Nebraska; the Vories 
Baking Company, of New Orleans; the Shelby Biscuit Company, 
of Memphis; the Grant Baking Company, of Chicago; and the 
Van Camp Packing Company, of Indianapolis, Indiana. 

He took charge of the Cracker Section for the Baking Division 
in January, 1918, and remained with the Food Administration 
one year. 

He is a member of the Illinois Athletic Club, of Chicago, the 
Flossmoor Country Club, of that city, and the Columbia Country 
Club, of Washington, D. C. 

He resides at 1109 East 83rd Street, Chicago, Illinois. 

His oldest son served in the Spanish War and a younger son 
saw active service in France. 




225 



RICHARD RICHARDSON WILLIAMS, JR. 

Richard Richardson Williams, Jr., was born at Canajoharie, 
New York, September 9th, 188s*. He nnished the course at tne 
Brooklyn Polytechnic Institute in 1900, and graduated from Will- 
iams College, 1904. 

After leaving college he entered the firm of Bear, Morgan & 
Co., bankers, New York City, which firm is now known as Kidder, 
Peabody & Company. He is manager of the Foreign Exchange 
Department of that company. 

In October, 1917, he was called for service in the Food Admin- 
istration, and for some time acted as general assistant to Mr. 
Whitmarsh and Mr. Ackerly. The readiness with which he 
grasped distributive problems soon made it possible to entrust to 
him greater responsibilities, and after Mr. Ackerly's retirement 
o\ving to ill health in April, 1918, Mr. Williams was made head 
of the wholesale section of the Distribution Division. 

It was with the greatest regret that the other members of the 
division saw his departure on August 27th, 1918, for active service 
in the United States Army, but Mr. Williams' patriotic fervor 
was such as not to be denied, and the early termination of the 
war alone prevented his service in France. 

His business address is 17 Wall St., New York City. 




227 



THEODORE FRANCIS WHITMARSH 

Theodore Francis Whitmarsh, Vice President and Treasurer of 
Francis H. Leggett & Company, was born in Brooklyn, N. Y., 
November 6th, 1869, the son of Henry C. and Caroline H. 
(Leggett) Whitmarsh. 

After a common school education he began his business career 
in 1886 with his uncle, the late Francis H. Leggett, and working 
his way through the various departments was admitted to mem- 
bership in the firm in 1896, becoming its Vice President and Treas- 
urer when the firm was incorporated in 1902. On the death of Mr. 
Leggett in 1909 he assumed the active management of the busi- 
ness. 

Besides this connection he is President and Treasurer of the 
Seacoast Canning Company and Treasurer of the American Can 
Company of Maine. He is a Director of the Irving National Bank 
and the Irving Trust Company, of the Famous Players Lasky 
Company, a Trustee of the Greenwich Savings Bank and a di- 
rector of the United States Chamber of Commerce. He is also a 
past President of the National Wholesale Grocers' Association of 
the United States, in which capacity he served for three years, 
ending in June, 1918. 

He is a member of the Blue Lodge, Chapter, Commandery and 
Shrine of the Masonic Order; member of the Metropolitan, Union 
League, Metropolitan Opera, Sleepy Hollow, New York Athletic, 
Knollwood, Percy Summer; the Chamber of Commerce • of the 
United States, the Chamber of Commerce of New York State, 
the New York Genealogical Society, Museum of Art, the Ameri- 
can Museum of Natural History, and of the Chevy Chase and 
Metropolitan Clubs of Washington. 

Mr. Whitmarsh served as head of the Distribution Division until 
the appointment of Mr. George A. Zabriskie to succeed him early 
in October, 1918. He also acted as assistant to Mr. Hoover and 
served on a large number of committees and boards for the pur- 
pose of co-relating the policies of all divisions of the Food 
Administration. 

Mr. Whitmarsh was a representative of the Food Administra- 
tion on the War Industries Board, and served on the Priorities 
Committee, the " Requirements " Committee, the Belgian Relief 
Committee, the Industrial Adjustment Committee, the Capital 
Issues Committee, and as Vice President, Treasurer and Director 
of the Sugar Equalization Board. He was one of a joint commit- 
tee of four to coordinate the work of the Bureau of Chemistry, 
Department of Agriculture, with that of the Food Administration. 

After Mr. Hoover's departure for Europe in November, 1918, 
Mr. Whitmarsh acted in his stead as chairman of the Committee 
for European Food Relief, and as alternate chairman of the Ex- 




229 



ecutive Committee controlling the affairs of the Food Adminis- 
tration during Mr. Hoover's absence, also as Acting Food Admin- 
istrator after January 10th. 

He married Lillian A. Smith of New York City, and has three 
children, Lieutenant Francis L. Whitmarsh, Lieutenant Karl R. 
Whitmarsh and Katharine Whitmarsh. Lieutenant Francis L. 
Whitmarsh saw active service in France and was seriously gassed, 
but his complete recovery is now indicated. Miss Whitmarsh for 
the period of the war was engaged in Red Cross work. 

Mr. Whitmarsh resides at 339 West 77th Street, New York City: 
his business address being 27th Street and 13th Avenue, New York, 
and he has a Summer Camp at Percy, Coos County, New Hamp- 
shire. 



CLEMENT R. WINSLOW 

Clement R. Winslow was born at Taylors Falls, Minnesota, 
August 18th, 1877, and is a graduate of the High School of Min- 
neapolis, and attended the University of the Pacific, San Jose, 
California. 

In 1898 he became associated with Nash Brothers, wholesale 
grocers, of Grand Forks, North Dakota. Since that time he has 
been an executive officer and organizer of what is known as the 
Nash Organization of wholesale grocers, which comprises about 
75 wholesale grocery concerns throughout the West and Northwest. 

On November 1st, 1917, he came to Washington at the request 
of Mr. George Lichty, and throughout the history of the Food 
Administration was actively connected with the Retail Distribution 
Section. To Mr. Winslow belongs a major portion of the credit 
for the organization of the work of price publication, and of the 
establishment of maximum margins for retailers. 

He remained with the Food Administration until December 10th, 
1918. His home address is Minneapolis, Minnesota. 




233 



TRELL W. YOCUM 

Trell W. Yocum was born in Mechanicsburg, Ohio, in 1893. 
After graduating from the Ohio State University, he became 
associated with the Lawrence Publishing Company, which position 
he held until July, 1917. He is a magazine writer of considerable 
reputation and has contributed many articles to various weekly 
and monthly publications. 

He entered the service of the Food Administration in July, 
1917, under Ben S. Allen, Director of the Educational Division, 
and was later especially delegated to cooperate with Mr. Walsh 
and Mr. Merritt in the General Publicity Work of the Distribution 
Division. 

In March, 1918, he was appointed to succeed James H. Collins 
as chief of the Trade and Technical Press Section, which position 
he held until the close of the Food Administration activity. 

He is a member of the Phi Delta Theta Fraternity, the Cleve- 
land Yacht Club, the Cleveland Citv Club and the National Press 
Club. 

He is author of the book " Along Homely Byways." 

His permanent address is 1011 Oregon Avenue N. E., Cleveland, 
Ohio. 




335 



GEORGE A. ZABRISKIE 

George A. Zabriskie was born in. New York City in 1868. He 
entered the flour business as an employee of the New York office 
of the Pillsbury Flour Mills Company as early as 1883. A few 
years later he assumed the management of the business, and finally 
took over the business as his own, building up one of the largest 
flour distributing organizations in the world. 

His business ability, coupled with a most intimate knowledge 
of the flour distribution business, rendered his services necessary 
to the Food Administration during the trying times of the winter 
of 1917-18 and the months that followed. As Flour Administrator 
his patriotic zeal and high executive ability contributed as much 
as any single factor to the successful operation of the "fifty-fifty" 
rule, and when, in the early summer of 1918, the sugar situation 
became serious, Mr. Zabriskie was selected to be Sugar Admin- 
istrator, in which capacity he served till he was made Chief of 
the Distribution Division to succeed Mr. Whitmarsh early in 
October. Upon the formation of the Sugar Equalization Board 
he was elected a Director and later was made President of that 
board, succeeding Mr. George Rolph, who resigned by reason of 
illness. Mr. Zabriskie has remained at the head of this board. 

Mr. Zabriskie has been connected with a great many important 
business activities in various parts of the world, and has not only 
won success, but has built for himself a most enviable reputation 
for fair and honest business dealing. He is a member of a 
large number of clubs and organizations among which are: — The 
New York Produce Exchange, The United States Chamber of 
Commerce, The Merchants Association of New York, The New 
York Board of Trade and Transportation, The India House, The 
Englewood Countrv Club, The Knickerbocker Countrv Club, Th~ 
New York Athletic Club, The Holland Society, The 'Salmagundi 
Club, The Horticultural Society, The American Geographical 
Society, The American Jersey Cattle Club, The Sons of the 
Revolution, The Old Colony Club, etc., serving upon many of their 
important committees. 

In addition to his business activities, Mr. Zabriskie makes 
painting one of his private hobbies, and in art circles he is well 
known, some of his paintings being meritorious. He is also a 
fancier of blooded live stock, and for a number of years has 
exhibited in live stock shows throughout the East, his cattle, 
hogs, and chickens winning first prizes in many of these contests. 

He resides at 222 Central Park, South, New York City, his 
summer home being at Alpine, New Jersey. 




237 



GEORGE A. CHAPMAN 

George A. Chapman became associated with the Distribution 
Division in charge of feeding stuffs. He was later transferred to 
the Coarse Grains Division, and served from March until Decem- 
ber, 1918. 

For twelve years he has been manager of the Animal Feed 
Branch of the Quaker Oats Company, and for five years has been 
President of the American Feed Manufacturers' Association. He 
resides at Oak Park, Illinois. 



HUNTLY M. CHILD 

Huntly M. Child is manager of the Yellowstone Park Hotel 
Company, and of the Yellowstone Park Transportation Company. 

He entered the Baking Section in October, 1917, and rendered 
valuable service in connection with the important work handled 
by this Division during the wheat shortage of 1917-18. 



JAMES A. FORD 

James A. Ford was born at Norwalk, Ohio, August 20th, 1872. 

He is a graduate of the Harvard Law School, and practiced 
law in Cleveland, Ohio. 

He became associated with the Distribution Division in Decem- 
ber, 1917, acting with Mr. Boyden in the Enforcement Section, 
and was later associated with Mr. Boyden in the Enforcement 
Division. 

He is a member of the L T nion County, the University, and May- 
field Clubs of Cleveland, Ohio. 

His business address is Society for Savings Building, Cleveland, 
Ohio. 



MRS. ALICE GUSHING GARDNER 

Mrs. Alice Cushing Gardner was born at Belmont, Massa- 
chusetts. She is a graduate of Radcliffe College. 

She became associated with the Distribution Division December 
10th, 1918, and took charge of answering miscellaneous corre- 
spondence. 

Associated with one or two others she represented the Home 
Conservation Section of the Distribution Division, which section 
had charge of the Food Administration's campaign for saving 
fruit pits and nut shells for the Gas Defense Service of the 
United States Army. 

She resides with her husband at Belmont, Massachusetts. 



ALBERTINE HOYT GLENN Y 

Mrs. Albertine Hoyt Glenny was born in Buffalo, New York. 
She is a graduate of Miss Parkers' School, Farmington, 
Connecticut. 

She entered the service of the Distribution Division February 
18th, 1918, and continued to November 9th, 1918. 

She was associated with Mrs. Gardner in answering miscel- 
laneous correspondence and in handling other matters properly 
belonging to that section of the Division. 

She resides at 93 Lancaster Avenue, Buffalo, New York. 

DUNCAN McDUFFIE 

Duncan McDuffie was born at Jefferson, Iowa, in 1877. He re- 
moved to California when ten years of age and later entered ths 
Universitv of California, where he received the degree of B.S. in 
1899. In"l90O he entered the office of Taft & Penrwver, a lead- 
ing department store of Oakland, soon working up to the position 
of Advertising Manager and Credit Man. 

In 1905 he entered into the real estate business in Oakland, 
under the firm name of Mason-McDuffie Company, opening a 
branch in San Francisco in 1913. He served as President of the 
City Planning Commission of Berkeley, California, 1915-1917, and 
joined the staff of the Food Administration in June, 1917. Mr. 
McDuffie was for a considerable time in charge of the Baking 
Section of the Distribution Division. 

His permanent address is Berkeley, California. 

FURMAN T. NUTT, JR. 

Furman T. Nutt, Jr., was born in 1869 in Brooklyn, New York. 

He was engaged in the green coffee business for some years 
and for the past six years has been a broker on the New York 
Coffee and Sugar Exchange. 

He came to Washington in June, 1918, and was associated with 
Mr. Lawrence in the Coffee Section, remaining in active service 
till after the signing of the Armistice. 

He is a member of the Hamilton Club of Brooklyn, and of the 
Monbank, F. & A. M. also of Brooklyn. 

He resides at Hotel St. George, Brooklyn, New York. 

MATTHEW PURCELL 

Matthew Purcell was born in Baltimore, Maryland, 1864. 

For 26 years he was in the grain and milling business of Buffalo, 
New York, associated with Pratt & Company of that city. 

He came to Washington on April 18th, 1918, and served with 
Mr. Evans and Mr. Stream in the Coarse Grains Division. 

His permanent address is Buffalo, New York. 



JOHN J. STREAM 

John J. Stream was born in Chicago, in 1870. He is a graduate 
of Lake Forest University in the Department of Law. He early 
entered the grain business and is at present a partner of the firm 
of Shaffer & Stream, 234 S. La Salle Street, Chicago, Illinois. 

In December, 1917, he was first associated with Mr. Evans in 
the Distribution Division in the Coarse Grains Section. When this 
work grew in importance so as to require a separate division Mr. 
Stream was given charge of this work and remained with the 
Food Administration until January, 1919. 

He is a member of the LTnion League Club, the Chicago Athletic 
Club, the Chicago Yacht Club, and the Westmoreland Country 
Club of Chicago. He is also a member of the Chicago Board of 
Trade, the Baltimore Chamber of Commerce^ the St. Louis 
Merchants Exchange, the Omaha Board of Trade, and the Mem- 
phis Merchants Exchange. 

He resides at 1617 Hinman Avenue, Evanston, Illinois. 



CATHARINE C. TAUSSIG 

Miss Catharine C. Taussig, the daughter of Professor Taussig, 
Head of the Political Economy Department of Harvard Uni- 
versity, comes from Cambridge, Massachusetts. 

She is a student at Bryn Mawr College of the class of 1919, and 
served with the Food Administration from July 8th, 1918, to 
September 4th, 1918. She was associated with Mrs. Gardner and 
Mrs. Glenny in the Home Conservation and correspondence work 
of the Distribution Division. 

She resides at 2 Scott Street, Cambridge, Mass. 



IRVING H. TAYLOR 

Irving H. Taylor started in business with Blodget & Company, 
bonds, New York City, in 1908. In 1911 he entered the alkali 
business with the Michigan Alkali Company, Wyandotte, Mich- 
igan, and some time later engaged in the cattle raising business, 
near Big Horn, Wyoming. 

He came to the Food Administration and volunteered his 
services, as he was anxious to do his bit to help win the war. 
For some time he was associated with the Complaint Section of 
the Distribution Division and later became General Correspondence 
Supervisor, continuing in that position until the fall of 1918. 



RICHARD J. WALSH 

Richard J. Walsh was born at Lyons, Kansas, in 1886. He 
graduated from Harvard University in 190T, at which time ha 
entered newspaper work as reporter for the Boston Herald. 

Some time later he became assistant secretary to the Boston 
Chamber of Commerce, and w r as made manager of the Curtis 
Publishing Company, of Philadelphia. 

He is a writer of some reputation, being author of the publica- 
tions " Boston," " Selling Forces," " Two Pages Facing," and 
" Two Color Advertising." 

He became connected with the Distribution Division in Septem- 
ber, 1917, acting as general publicity man and advertising repre- 
sentative, preparing copies of news items for the press, and co- 
operating in the work of the Public Education Division of the 
Food Administration. 

For several months Mr. Walsh devoted two days of each week 
to the service of the Food Administration. 

Fie is a member of the Art Club, Philadelphia, the Merion 
Cricket Club, also of that city, the Stowaways of New York City 
and the Harvard Club of New York. 

At the time of his connection with the Food Administration he 
resided at Ardmore, Pennsylvania. 



DANA F. WARD 

Dana F. Ward was born at Chelsea, Mass., in 1874. He en- 
gaged in the wholesale fish business in 1900, organizing the firm 
of Whitman, Ward & Lee Co., of Boston. He is also Director 
and Advertising Manager of the Boston Fish Pier Co., which com- 
pany has brandies on both the Atlantic and Pacific Coasts. 

During the winter of 1916-17 he was connected with the Massa- 
chusetts Food Commission, lecturing on the value of frozen fish 
as a food. When the Retail Section of the Distribution Division 
took over the distribution of perishables at retail, Mr. Ward was 
called to Washington in May, 1918, to take charge of the retail 
distribution of fish. Through his activities a complete survey of 
the fish situation throughout the United States was made, and 
material progress was effected in encouraging the use of those 
varieties of fish which were low priced and in plentiful supply. 

He resides at Somerville, Mass. 



J. SPENCER WEED 

J. Spencer Weed is a native of Middletown, New York. After 
graduating from Williams College in 1904, he entered the employ- 
ment of the Great Atlantic and Pacific Tea Company and is now 
General Superintendent in Charge of Operation. 

He was called to Washington in the Spring of 1918, and during 
the early days of the Sugar Certificating plan he had charge of 
adjustments and complaints relative to Sugar Distribution. 

Mr. Weed resides at Short Hills, N. J., and his business ad- 
dress is 150 Bay St., Jersey City, N. J. 

He is a member of the Carteret Club of that city. 



H 304 85 '< 



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